Direct client wants to switch to agency... umm help?

**NotAllThere** · 4 July 2018, 19:48

I was direct with a client who decided that they wanted to reduce the number of suppliers, so I had to go via an agency. The rate I received was protected and I got slightly better payment terms. That's the angle you should go for.

You don't own your contract. That's just nonsense. You paid to go direct. That's it.

Make sure your new contract and work practices are outside of IR35, carry on billing and don't worry about it.

**Cirrus** · 4 July 2018, 21:01

They Have The Whip Hand

Not sure what your grievance is. Are you losing the 5%? If so, it might be worth it. Agencies usually pay within a couple of weeks ('weekly') or possible 5-6 (four weekly or monthly). Companies can take many months to settle invoices. I've seen around 10+ months before. However from the tone of your note I suspect you've been getting an all-round good deal. You shouldn't be surprised if someone slung a spanner in the works. I can never see why a client would have contractors direct. So many downsides.

You said you made a lot of noise about IR35 but I fail to understand why they would have the slightest bit of interest in that angle.

If you are actually losing anything then it's worth pestering the client to make good the loss. However, as always, it's a matter of how much you want the work. Forget what has been going on for the last 2.5 years. That's gone. Look to the proposition they have made from a zero based perspective ie not comparing it with what you have had up to now.

**fatJock** · 4 July 2018, 21:11

Bet the reality is you just feel mugged off for paying £25K to get out of one agency contract only to find some new handcuffs waiting for you a couple of years later.

Suck it up and keep on invoicing or continue to behave like a petulant child annoying both the customer and the new incumbent agency.

You’re unlikely to win this argument. Best make the most of it or move on out of principle. I doubt it’ll be the latter as principles aren’t cheap.

**northernladuk** · 4 July 2018, 21:51

After 5 years at a client I don't think moving to an agency is your biggest worry.

**MrButton** · 4 July 2018, 22:30

Originally posted by steeevvo View Post

I have been working at a client for 5yrs. The first 2.5yrs (6month renewals) was via an agency. Long story short there, but I ended up buying myself out of the contract (£25k+) and have been happily working direct for the last 2.5yrs.

You paid the agent £25k (+) to go direct?

WOW. Fair play you got another 2.5 years. But. Wow.

**NotAllThere** · 5 July 2018, 06:23

Originally posted by northernladuk View Post

After 5 years at a client I don't think moving to an agency is your biggest worry.

And you know this because you've seen the contract and have a detailed knowledge of the working practices?

Originally posted by MrButton View Post

You paid the agent £25k (+) to go direct?

WOW. Fair play you got another 2.5 years. But. Wow.

If £25K was 6 months margin, then he's £100K up. Smart move if you can do it, but for most of us the risk of the contract terminating is too high.

**MrButton** · 5 July 2018, 07:03

Originally posted by NotAllThere View Post

If £25K was 6 months margin, then he's £100K up. Smart move if you can do it, but for most of us the risk of the contract terminating is too high.

True

**northernladuk** · 5 July 2018, 07:59

Originally posted by NotAllThere View Post

And you know this because you've seen the contract and have a detailed knowledge of the working practices? .

I did state his time there is a bigger worry than how he's engaged which is true on three fronts. Firstly his engagement method has next to nothing to do with IR35 so time is more of a worry. Secondly if he thinks the engagement could show an issue with his knowledge of IR35 and thirdly nearly everyone I've met with over 5 years at a gig is part and parcel and have taken their eyes off the game. I did 4 and bit years and it was getting harder and harder to look the same as I did when I first started.

So yes. He's got more to worry about re time there than his engagement method.

**Old Greg** · 5 July 2018, 08:11

Originally posted by steeevvo View Post

Hi All,

Hoping I can pick your brains for some info!

I have been working at a client for 5yrs. The first 2.5yrs (6month renewals) was via an agency. Long story short there, but I ended up buying myself out of the contract (£25k+) and have been happily working direct for the last 2.5yrs.

Issue now seems to be that an agency has wangled its way under the skin of the company and are now the single suppliers of contract and perm staff. The issue is that they have managed to work their angle so well, that the company policy is now to put all existing contractors through the agency (for a nominal 5% of the contract rate!)

I have pushed back, but it looks like its a take it or leave it option. I've never heard of this before, EVER! Its usually the other way around (removing the agency).

I've made a lot of noise regarding IR35 status - Move from a company supplying services to a temp supplied via an intermediary; Higher and lower contracts not being aligned (potentially, they won't show me theirs); Agency reporting all non PAYE payments to HMRC being a future hitlist etc. But do not have a supporting point of contact.

Any thoughts on other issues I may have missed or approaches I can take?

I have raised the fact that the contract is mine (I purchased it) not theirs to award to whoever, but it has fallen on deaf ears and doesn't look like they will entertain a rate rise to recoup these costs long term.

Many thanks in advance.

5% seems about right for someone like Hays to payroll. If it doesn't cost you anything (e.g. you are not going from 500 pd to 470 pd, but you are still receiving 500 pd and the agency is putting a mark-up on top, which the client is covering for the convenience of a single supplier), what is the problem? You'll probably get weekly invoicing and 7 day payment terms.

In any case, what leverage do you have? I expect you need to suck it up or walk. As others have said, you don't own the contract, the client is the client.

Direct client wants to switch to agency... umm help?