Client deducted CIS by "third party" under common ownership
My client is a skilled engineer registered for CIS as a subcontractor. He has been working through an employment agency and sought out a 3rd party payroll company (like Sterling CIS but not them! ) to manage his payments as he wished to preserve his self employed status. Contract has been more than 12 weeks and it turns out that the so called 3rd party he was advised to use by the agency is actually owned by the same directors. It's a separate legal entity at Companies House but is under common ownership. This doesn't sound right at all but are there any issues for him or do all problems lie with the agency who are surely in the firing line to be deemed employers? If they are able to do this legally why to the likes of Hudsons and Sterling have so many clients? My client is worried and I'm not reassuring him as I agree that it looks like he's employed direct.