Contracts where there is a middleman who wants a cut

[northernladuk]

...So clearly from all said above, things like this happens. It's a long term contract, inside IR35 and the cut is throughout the whole gig. I plan not to stay long since inside IR35 but it just does not sit well with me at all that someone is benefiting off me in that way.

How much we talking here? Can you find who it is and go direct?

[TheDogsNads]

Fast forward to now, I am in a similar situation, person wants a cut. I would like to say no but I am just about coming out of a year long self imposed benching following a 12yr stint at 1 client.

I guess the question is if this happens a lot in contracting

12 year stint at 1 client?! Jesus. I just wonder whether some of these clients know they have a 'temporary' resource or a permie one.

Ive given a number of people direct leads to agents for roles I turned down. Never asked for a 'cut.' I clearly missed an opportunity there!

[Lance]

...So clearly from all said above, things like this happens. It's a long term contract, inside IR35 and the cut is throughout the whole gig. I plan not to stay long since inside IR35 but it just does not sit well with me at all that someone is benefiting off me in that way.

referral fees are fine for business, but not employment.
This is employment. Tell them to foxtrot oscar.

[css_jay99]

I know the end client. No agents involved and I can't go direct. I will be working at end client via a consultancy that handles a lot of their projects/IT resources.

My limited knowledge is that he will be advocating a rate hike by e.g another £50-£100 daily to get the 'right' resource. His cut comes within that extra buffer. I got an impression he does this a lot.

[ladymuck]

This person wanting a cut - do they work for the consultancy? Or are they going to recommend you to the consultancy and act as the fee payer in the chain, taking their cut then dealing with the PAYE/NI liability for an inside contract?

A consultancy, who is the fee payer, should be pricing in their markup to the client and telling you the rate they will pay to you with a KID illustrating the net you'll receive.

Something really feels off about this, based on the scant info you've shared.

[eek]

This person wanting a cut - do they work for the consultancy? Or are they going to recommend you to the consultancy and act as the fee payer in the chain, taking their cut then dealing with the PAYE/NI liability for an inside contract?

A consultancy, who is the fee payer, should be pricing in their markup to the client and telling you the rate they will pay to you with a KID illustrating the net you'll receive.

Something really feels off about this, based on the scant info you've shared.

Consultancies don't need to provide KIDS only agencies - although if an umbrella is employing you they should be providing an illustration with identical figures

[ladymuck]

Consultancies don't need to provide KIDS only agencies - although if an umbrella is employing you they should be providing an illustration with identical figures

How is a consultancy different to an agency when it comes to putting a bum on a seat? Off topic, I know, but to me there's often very little difference between the two so I don't see why one has to produce a KID and the other doesn't.

Anyway, the arrangement still has a dodgy whiff about it

[northernladuk]

I know the end client. No agents involved and I can't go direct. I will be working at end client via a consultancy that handles a lot of their projects/IT resources.

My limited knowledge is that he will be advocating a rate hike by e.g another £50-£100 daily to get the 'right' resource. His cut comes within that extra buffer. I got an impression he does this a lot.

Wish you bleedin told us this in the first place!

So a micro consultancy is picking up bum on seats roles with their client. This is very common. Consultancy gets on a clients PSL, wins work to deliver a service and then through chatting to the right people they start to fill random bums on seats. In the two cases where I've been in via this method there was an incumbant preferred agency who weren't very happy about the situation but it went on for years.

This is more like a standard agency/consultancy resourcing situation. You made it out like the middleman was some random contractor, not a business with fingers in the clients pie. Paints a whole different picture.

So yes, they are within their rights to charge a percentage per day as they will no doubt to be around and responsible for you on site and for handling the paperwork just like an agent.

Why did you think this is any difference than a client -> agent -> contractor situation?

They aren't taking a cut of your rate, you are getting the lions share of theirs as Mal would say. Client pays them, it's their money, they take their commission and you get the rest. On top of that you've an umbrella in the way (I assume) so again, you are getting paid by the brolly, all the rest of the finance chain is not really anything to do with you.

What are the arrangements to get paid? Brolly or are the consultancy doing your payroll?

This sounds similar to the setups the agencies used to where they employ someone to go to their client and do the contracts and pocket it themselves. Hyphen/Spring et al.

Anyway, the arrangement still has a dodgy whiff about it

The only dodgy whiff I have is the lack/quality of information we are being given.

[ladymuck]

The only dodgy whiff I have is the lack/quality of information we are being given.

I meant whiffy until we knew if the 'middleman' is working for the consultancy or not.

If they are a rep of the consultancy then I agree with you and the drip feed of info is tedious. If they are going to tout the OP to the consultancy and intercept their payments in order to take a cut, then I'm still getting an unpleasant waft.

I reckon the latter is highly unlikely though.

[css_jay99]

This person wanting a cut - do they work for the consultancy? Or are they going to recommend you to the consultancy and act as the fee payer in the chain, taking their cut then dealing with the PAYE/NI liability for an inside contract?

A consultancy, who is the fee payer, should be pricing in their markup to the client and telling you the rate they will pay to you with a KID illustrating the net you'll receive.

Something really feels off about this, based on the scant info you've shared.

You hit the nail on the head. He works for the consultancy who won't be privy to the arrangement so I am guessing the KID will show the higher amount, then me handing over the cut later on.

The legality is my main concern rather than the greed. My thoughts are that I should walk away