Payments terms and inside IR35 what is "normal" today ?

[ConsultingTechArchitect]

What has consultancy and end clients payment terms got to do with the payment terms of an employment agency?

One of the big points of using an agency is that they have to pay the work regardless of whether their client pays and ideally should do so within 7 days of the work being done...

Heck I mentioned an agency with 45 day payment terms below.

The requirement for an umbrella to get on their PSL is to pay the worker within 7 days so "lending" the agency the money for 38 days....

I've seen agencies take into account the date they get money from their client then add a few days to make sure the money has cleared before paying on to the contractor. Depends on the agency. The agency Accenture forced me to use tried to do this (long time ago).

[TheDude]

My agency use a random number generator to schedule my payments.

[SussexSeagull]

I haven't had anything other then 28 days/30 days/Month terms for about a decade. Some have been a little tardy paying but payment terms haven't varied much for me in ages.

[Peoplesoft bloke]

First off. You've made the same mistake as so many people do. Being inside is purely a tax situation. Has nothing to do with your clients, they you work etc. You are still contracting but with a different tax regime. B2B payment terms of up to 90 days with multiple people in the chain do not change. Only the way you are taxed. No extra protection or anything.
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But being inside IR35 happens because the "contract" is actually disguised employment - all the tests of a B2B relationship have failed. So if I'm taxed like an employee, they can pay me like an employee too.

[Guy Incognito]

But being inside IR35 happens because the "contract" is actually disguised employment - all the tests of a B2B relationship have failed. So if I'm taxed like an employee, they can pay me like an employee too.

I've not had many permie jobs but don't they all pay monthly? Mine did...

[eek]

I've not had many permie jobs but don't they all pay monthly? Mine did...

I suspect the issue is that the umbrella pays the worker when the umbrella receives the money so the money for the work you did in July is received at the end of August.

Were you a permanent employee you would be paid at the end of July for work done in July.

[CoolCat]

Spent most of my time on 30 day terms, never once gone significantly beyond that. Don't worry about it.

Its only got messed up for me once, when the consultancy that was in the chain and the end customer senior folk fell out with each other. Ended up being delayed payments. Consultancy kicked off site. Was offered work directly with end client. Got paid in the end.

[CoolCat]

But being inside IR35 happens because the "contract" is actually disguised employment - all the tests of a B2B relationship have failed. So if I'm taxed like an employee, they can pay me like an employee too.

there is at least a 50% chance the new PM will change IR35 rules next week, or maybe in emergency budget shortly after

[eek]

there is at least a 50% chance the new PM will change IR35 rules next week, or maybe in emergency budget shortly after

No there isn't

IR35 doesn't work but it's the only thing that is keeping a lot of people employed rather than being forced into self-employment alongside the offer of a few more quid...

Remember - as I continually point out but people never seem to grasp we aren't the intended target here merely acceptable collateral damage.

[Lance]

there is at least a 50% chance the new PM will change IR35 rules next week, or maybe in emergency budget shortly after