bumping rates due to inflation

[Guy Incognito]

I have always worked for the rate I could achieve at the time. You can use inflation as a negotiation tactic but ultimately you will get whatever rate you negotiate.

I've had two rate reductions during Covid but the cost of doing business has gone down as I now work exclusively from home.

Inflation itself is a non issue I don't spend a large enough percentage of my income on the things it tracks.

[northernladuk]

It's entirely reasonable to put a sensible case to your client based on inflationary pressures, but whether they agree is another thing. More typically it would be done at renewal but there's nothing to stop you mid-contract if you have a strong argument, I suppose.

But it isn't reasonable for a one man contractor with no businesses costs to put a sensible case to a client for inflationary pressures. Other businesses maybe but a one man contractor? No. And putting it in mid contract is a no no. There is no strong argument for a couple of percent increase because of inflation mid contract. Just makes you look like trouble which is a strong argument not to. Renewal yes but again, just no need to bother mentioning inflation. Just stick it to them and say you want X and hold tight. Putting an excuse with it won't make one iota of difference.

I guess you 'could' do what you suggest but they are all bad ideas to do as and when you state. Possible yes, good ideas? No.

[d000hg]

But it isn't reasonable for a one man contractor with no businesses costs to put a sensible case to a client for inflationary pressures.

Indeed, because the majority of contractors aren't actually businesses and your Ltd is just a vehicle for your personal services. Your client does not see you as a business, they see you as "Dave working through his Ltd" or "Steve that the agency supplies". So you might as well try and play the inflation/cost of living card...

[northernladuk]

Indeed, because the majority of contractors aren't actually businesses and your Ltd is just a vehicle for your personal services. Your client does not see you as a business, they see you as "Dave working through his Ltd" or "Steve that the agency supplies". So you might as well try and play the inflation/cost of living card...

Possibly but might as well just stick it to them and threaten to walk. Same outcome either way. I personally think playing the inflation card is weak and the agent will see it and play you like a fiddle. They know you won't leave for a few percent. They also know you are taking in over 100k so won't be worrying about inflation like they have to. I'd rather just go in and say my rate is now £XXx thank you, than make poor excuses.

[oliverson]

They are also looking to shave costs because the market is getting tougher. I'm with Lance on this one. There will be no rate rises because of inflation, more chance of the opposite. Clients tend to have rate cards and they aren't going to move them a few percent to keep in with inflation. IMO contractor rates are too far from inflation to be affected. I don't think I will be rocking any boats for a few quid here and there. Get the first piece of work done and then pressure the agent for any rises as we have always done.

Surely the WFH option has swelled the coffers more than a few percent hike on your rate? Does that not cover it?

This one. I considered pushing for a rate bump at last renewal but then reality kicked in:

1. Due to 100% remote working I no longer incur London expenses (£ 30k p.a. accommodation/travel/subsistence)
2. My current day rate is the same as my last London day rate
3. My current client is overseas and the exchange rate at present adds around £75 to my day rate, long may it continue
4. It's outside IR35
5. There's a large programme of work

So, to summarise, I'm up to around £ 50k p.a. better off, zero commute, outside IR35 and working with a decent bunch of people on an interesting project using latest tech. Probably the best contract I've ever had and maybe (hopefully) the last one.