Cost Of Living Increase

**SimonMac** · 11 July 2012, 19:41

Originally posted by BusinessAnalyst2012 View Post

Thanks for all your advice on my previous thread. I have now read all the guides and I think I get it - sorry if my questions and terminology were a bit off before

Anyway, my thread before turned out to be unnecessary - the client has decided that I won't be let go after all but redeployed onto a different project in the same company.

I decided that this might be a good time to approach the client for an increase in my rate. He said that I should go to my agency - is this normal? When I approached the agent, he said he would be prepared to give me a "cost of living" increase.

My question is, how do I calculate the cost of living? I said I would get back to him tomorrow so any responses appreciated!

Your contract is with the agent, so yes of course you should go back to them to renegotiate terms, as for a cost of living increase, this is usually 2-3% so they are looking at giving you £10-£20 a day depending on your rate

**northernladuk** · 11 July 2012, 19:53

You are not gonna survive long unless you pull your socks up. Your situation is just ridiculous. For you to not understand the basics of who your contract is with and who pays you is just staggering. You are a business now and have to act like one else you are going to lose a hell of a lot of money when you screw up an IR35 investigation. Coming back to that there is also the question of your professionalism. Your client cannot be pleased you are asking him such daft questions.

Also rate rises are about negotiation, you tell him what you want, he negotiates... I mean.. how do you calculate the cost of living? Hells bells. What he means he will give you peanuts to go away and leave him alone. To be fair the agent has probably got your measure and will offer you nothing. Unless you are prepared to negotiate hard or walk he will see straight through you.

Right, back to IR35... So.. not only is your utter lack of knowledge of how your business works making you look like a hidden permie but your client will also be treating you as such now as you are not acting like a contractor. The fact he has 're-assigned' you means you are inside IR35. Period. You can make your contract look like what you want but only permies get re-assigned.

Contract your accountant and make him aware that you are now working inside IR35 and to do the needful.

**SueEllen** · 11 July 2012, 20:23

And breathe!

To put it politely BusinessAnalyst2012 you need to ensure the contract you have assigns you to a specific named project/deliverables, and when you are on the client site you only work on those.

If the client wants you to work on another project/different deliverables and you agree, then you need to get your contact amended so the new project/new deliverables are mentioned.

I suggest if you haven't got your contract reviewed by a contractor reviewing service or by a lawyer you do so before you sign the extension.

Also get IR35 investigation insurance by either joining the PCG or buying it from QDOS.

Otherwise you could find out many years down the line after you have left the contract HMRC come knocking, demand their money and threaten to bankrupt you.

**Wanderer** · 11 July 2012, 20:36

Originally posted by BusinessAnalyst2012 View Post

When I approached the agent, he said he would be prepared to give me a "cost of living" increase.

My question is, how do I calculate the cost of living? I said I would get back to him tomorrow so any responses appreciated!

If the client says "talk to the agency" then that's what you have to do. Some clients will negotiate with you direct, mostly they will refer you to the agency to do the dirty work.

Most likely the agency is on a fat margin taking 25% or more of what the client pays them and giving you the rest. Find out how much the client is paying the agent, you should be trying to get their cut down to 10% or less if you possibly can. Tell the agency if they don't play ball then you will tell the client how much margin they are ripping them off for and walk off the job so the agency will get nothing and the client won't use the agency any more either.

Justification for the rate rise? Cost of living? What's that got to do with anything? Grow some cojones my friend, you're not some permie wage slave, you're supposed to be damned good at what you do and we're in business to make money.

**lukemg** · 12 July 2012, 09:37

WTAS x1000
Don't be going cap in hand.
Agent contacts you about a renewal, respond you are interested, is there scope for a rate rise ? (after 12 months say or change of job responsibility). They may well try to talk you out of it, up to you how hard you can push - 'well, I am looking for a 5% rise'
Any rise is nice, 5% is nicer, anything more is unusual unless agent cuts into margin/they REALLY want you (might resent you later on though)
DONT make a big explanation/justification at this stage, some send you a form.
Good luck but dont get all personal about it, it's business so treat it as such.

Cost Of Living Increase