Why do employers make contractors convert to a company?
We get a lot of customers who are sole traders come to us saying they need to form a company so they can be awarded a contract. Converting from a sole trader to a company is relatively straight forward, the question is why do employers only want to deal with a company?
Work cannot be delegated. A particular person needs to turn up for work.
Obviously there is a lot of room for interpretation! To remove the large grey area where they may be penalised, employers force potential contractors to register a company. Doing this pushes all the obligations mentioned above onto the sole trader’s company while minimising the chance the employer will be penalised for contractors being classified as employees. That’s why they do it.
This entry was posted on Tuesday, October 28th, 2014 at 12:35 am	and is filed under Starting out.