invoicing client direct

[bikeman]

I've been offered a contract which was advertised by an agent. Usually I would work via an umbrella company (I don't have a ltd co) and would complete the agents timesheets etc.

Now the agent says he wants to drop out (mmm) and I'll be invoicing the client directly. I am guessing there probably wont be timesheets either.

I've not received the contract terms yet but I assume there will be stuff in there which will make hmrc see me as an employee so I am concerned that I should pay employers NI. I wouldn't know whether I should or how to settle employers NI. Should I still use an umbrella co? I don't want to go down the ltd co route for a short contract.

Your thoughts?

[JoJoGabor]

I think the client will expect you to have a limited company or to go through an Umbrella. No reason to have you as an employee?

Id be nervous why the agent is dropping out? Are the client credit worthy?

[bikeman]

I don't think there's much to worry about re the client's credit worthiness, they are quite established.

Could I treat it as a bit of freelance work? I'm not vat registered and not a ltd company. When I've done freelance work I've not worried about employer NI - should I worry about it in this case?

[doconline]

I've been offered a contract which was advertised by an agent. Usually I would work via an umbrella company (I don't have a ltd co) and would complete the agents timesheets etc.

Now the agent says he wants to drop out (mmm) and I'll be invoicing the client directly. I am guessing there probably wont be timesheets either.

I've not received the contract terms yet but I assume there will be stuff in there which will make hmrc see me as an employee so I am concerned that I should pay employers NI. I wouldn't know whether I should or how to settle employers NI. Should I still use an umbrella co? I don't want to go down the ltd co route for a short contract.

Your thoughts?

You've got a couple of options, you could invoice directly. The contract will be between you and the client. I think this potentially leaves open to unlimited liability for the work you do, depending what is in the contract on your side. One of the reasons contractors use Ltd companies. Regarding NI rates, I don't think you pay employers NI, self employed NI rates can be found here. Think you settle your NI with your self assessment, but probably worth confirming with an accountant. Or you could still go through an umbrella, but you will be liable for employers and employees NI, but will have some protection in place, as you will not be directly liable for your work.

Do you know why the agent wants to drop out? Extremely unusual for them to find a candidate and then decide not to want anything for the work they have done. This would be ringing alarm bells. Also, If you are working direct for the client, make sure you are very clear on teh payment terms. As 90 days will not be uncommon, and if it is a short contract, the work could well be delivered and you've moved on before you have to start chasing invoices.

[TheCyclingProgrammer]

I don't think there's much to worry about re the client's credit worthiness, they are quite established.

Could I treat it as a bit of freelance work? I'm not vat registered and not a ltd company. When I've done freelance work I've not worried about employer NI - should I worry about it in this case?

If the client is happy to engage you as a self-employed freelancer then do it. If it's a one-off piece of freelance work then you may not have to register as self-employed, you could simply declare it on your tax return as "Additional freelance income" (I can't remember the exact box). If you expect it to be a regular thing, then register as self-employed.

You may find though that the client would prefer to engage you through an intermediary in which case you'll probably want to use an umbrella.

[Agent]

Extremely unlikely that the agency has just 'dropped out' - more likely he's agreed a margin only basis because they couldn't deal with the clients payment terms. I'd be expecting 60-90 dys EoM...

[bikeman]

I assume the agent got a flat fee but I didn't ask.

If I rule out setting up a ltd co and accept the liability (possible but not necessarily wise). I was always under the impression that agents insisted on employing via umbrella cos to limit their liability but in the case of working direct for the client, unless the client specifically says ltd or umbrella co why shouldn't I just treat it as a piece of freelance work? I am already registered self employed.

Maybe I am being a bit thick but why would I chose to go umbrella and pay the employers ni unless they insisted? Isn't that for them to worry about? Or is this really not my choice and is determined by the contract wording?

Just a bit confused.

[LondonManc]

I'd start from scratch and get the contract checked for IR35 status.

Then get the billing terms agreed and, given that the agent has dropped out, run a credit check on the client.

[TheCyclingProgrammer]

If you're going direct as self employed then no need for an IR35 review as it's irrelevant. Any risk false employment claims will be borne by the client. Not your problem.

[SueEllen]

Extremely unlikely that the agency has just 'dropped out' - more likely he's agreed a margin only basis because they couldn't deal with the clients payment terms. I'd be expecting 60-90 dys EoM...

Not necessarily for the contractor/freelancer.