[MatthewWilkes]

I was a sole trader for many years and am now incorporated. Usually agencies won't touch sole traders as they'd be on the hook for disguised employment whereas if you have your own Ltd it's your problem if HMRC decides IR35 applies to you.

Sole traders won't be getting capital gains, so you won't personally be out anything, but the agency doesn't want to have to worry about having to have all their coders suddenly be able to claim on their employer's liability insurance or to be on the hook for NI.