Discussing inside rates with an agent

[ladymuck]

I got approached for an Inside IR35 gig and a rate was quoted. The rate didn't say if that was the gross rate including employment and employee taxes, or if it was the rate to me and therefore only subject to employee taxes. So I asked, mentioning that Chapter 10 says the payment should only be subject to employee taxes. I have to say, I expected to be ghosted.

This is the reply I got:
"This role is inside IR35 - this means you will be paid a day rate that taxes and deductions will be taken off before payment - you will be taxed only once".

Clear as mud. Not sure if clueless or wilfully avoiding the question.

So I asked again:
"I would certainly hope to only be taxed once. That's not my question. Does the rate cover employment and employee taxes - i.e. will I receive the net of all these deductions: employers NI, apprentice levy, employee NI and PAYE? Or will this rate only be subject to employee NI and PAYE? The difference is significant."

This time I get:
"Sorry I misunderstood your question. The rate is to the employee who in turn is then responsible for the taxes deducted from that"

That actually makes the rate worth considering, if I understand that to mean only EeNI and PAYE is to be deducted. But the woolly language still has me nervous. I suspect, having asked too many questions, I will no longer be considered for the role but I'm keen to use it as a learning exercise should I have to take on an inside role.

As there doesn't seem to be clear terminology in use, and I wouldn't expect to see a KID at the enquiry stage, what's the best way to try and get a clear answer from an agent?

[gables]

So far I've always used an umbrella for inside roles so I just ask what is the rate that goes to them.

[ladymuck]

That's what I was trying to get to the bottom of. As some agencies run payroll, that's not always going to be the case. But actually, maybe that's the question I should have asked.

[eek]

I got approached for an Inside IR35 gig and a rate was quoted. The rate didn't say if that was the gross rate including employment and employee taxes, or if it was the rate to me and therefore only subject to employee taxes. So I asked, mentioning that Chapter 10 says the payment should only be subject to employee taxes. I have to say, I expected to be ghosted.

This is the reply I got:
"This role is inside IR35 - this means you will be paid a day rate that taxes and deductions will be taken off before payment - you will be taxed only once".

Clear as mud. Not sure if clueless or wilfully avoiding the question.

So I asked again:
"I would certainly hope to only be taxed once. That's not my question. Does the rate cover employment and employee taxes - i.e. will I receive the net of all these deductions: employers NI, apprentice levy, employee NI and PAYE? Or will this rate only be subject to employee NI and PAYE? The difference is significant."

This time I get:
"Sorry I misunderstood your question. The rate is to the employee who in turn is then responsible for the taxes deducted from that"

That actually makes the rate worth considering, if I understand that to mean only EeNI and PAYE is to be deducted. But the woolly language still has me nervous. I suspect, having asked too many questions, I will no longer be considered for the role but I'm keen to use it as a learning exercise should I have to take on an inside role.

As there doesn't seem to be clear terminology in use, and I wouldn't expect to see a KID at the enquiry stage, what's the best way to try and get a clear answer from an agent?

That second terminology is completely wrong and the reason why the entire umbrella industry is in the mess we are in.

It comes down to a basic point - inside IR35 rates really should be advertised as a PAYE rate - but the Advertising Standards Agency don't believe Job adverts are within their remit (they are but the ASA would prefer to bury their head in the sand).

Oh and I fix would be for a KID to be required at this point because then people would know what they payment actually included - and you've seen how stupid your average agent is...

[ladymuck]

So a KID ought to be available from the outset? That makes sense now I think about it as it's not hard to make an illustration based on the standard rates and then add a 'subject to your chosen umbrella's fee'.

[eek]

So a KID ought to be available from the outset? That makes sense now I think about it as it's not hard to make an illustration based on the standard rates and then add a 'subject to your chosen umbrella's fee'.

It's not at the moment - the requirement is that you get the KID before you agree terms but my argument was always that's too late if you've wasted 2 days doing interviews for the contract...

KIDs really should be provided alongside the application form / job description and at the very latest alongside the interview invitation..

And you don't even need to put the chosen umbrella fee just say based on a typical umbrella fee of £x a week / month.

[mattster]

This time I get:
"Sorry I misunderstood your question. The rate is to the employee who in turn is then responsible for the taxes deducted from that"

My interpretation of that would be that the rate is gross and you/the umbrella company are responsible for everything.

Is it a common practice to show a PAYE equivalent rate (net of employer's NI and fees)? If so I'm not sure that I have clocked that, and I would imagine agents prefer to advertise a gross figure for the simple reason that it is a larger number.

[ladymuck]

My interpretation of that would be that the rate is gross and you/the umbrella company are responsible for everything.

Is it a common practice to show a PAYE equivalent rate (net of employer's NI and fees)? If so I'm not sure that I have clocked that, and I would imagine agents prefer to advertise a gross figure for the simple reason that it is a larger number.

Therein lies the problem. It's misleading as you're then expected to do a load of calculations to get an idea of what you would expect to take home. If it was a PAYE rate then at least it's on the same playing field as an employee.

[ladymuck]

I have asked for a KID. Place your bets:

a) The response is 'what's a KID'
b) The response is we only issue a KID with the contract'
c) The response is 'your umbrella should issue the KID'
d) Something else
e) No response

[SueEllen]

I have asked for a KID. Place your bets:

a) The response is 'what's a KID'
b) The response is we only issue a KID with the contract'
c) The response is 'your umbrella should issue the KID'
d) Something else
e) No response

Your response will be