How to Use a UK Ltd Company for Contracting Through Agencies — Complete Guide (2026)

Many IT and professional service contractors work through agencies (recruitment agencies) into end clients. The Ltd company invoices the agency; the agency invoices the end client. IR35 status depends on the working arrangements — if "inside IR35," the agency deducts PAYE as if the contractor were directly employed. Tax planning for contractors includes correct contract drafting, multiple client strategies, and pension contributions to extract tax-free income.