Reply to: Fee charged towards Contractor Management System

[eek]

the 'charge' is not an expense to your business though is it?
It is a rate reduction for your business.

This is blindingly simple. Take it or don't.

+1 - all that has happened is that another company has been inserted between the agency and the end client and that change is being reflected in your end rate.

So it goes

End client pays 100%
CMS - receives 100% pays out 99.35%
Agency receives 99.35%

But as I new contract has been issued you only have 1 choice - accept the new contract or try to find a new one.

And given how little has changed I would take the new contract - it's not as if it is a 25% take it or leave cut.

[Lance]

I know about IR35 regulation but wouldn't call myself to be an expert.

Yes, this has come midway through the current contract. Yes, they have served notice the new contract comes into force from mid Jan.

There is no mention of the 0.65% charges, the rate is just reduced to reflect the 0.65%.

My point is if this is a charge that I would need to bear, I would expect this to be reflected on the contract and I get a proper VAT receipt for the charges I paid. I will claim this as an expense to my business.

the 'charge' is not an expense to your business though is it?
It is a rate reduction for your business.

This is blindingly simple. Take it or don't.

[alshanky]

I would quibble it in an existing contract, in a new contract I'd accept its the cost of taking the business, but for an existing contract with no mention then I'd argue the toss or get them to up my rate by 1% to enable the cut to be taken

Yes, this is precisely my point, thanks for your feedback.

[alshanky]

What is the fee meant to cover / provide?

No idea, this came through as an email which just states, the client wants to move to a new contractor management system while the contractors were asked to go on furlough

[alshanky]

Assuming you bill 500/d and 22 days a month this is £11000 a month. 11000 * 0.0065 = £71.5 a month. You are going to quabble over 70 quid a month with your client? Are you stupid?

I wouldn't either, but the point is this being enforced without a proper mention on the contract. If this was a legitimate charge towards a system that the client wants to implement, I would have expected a flat fee of £10 or £20 per month. £70 is still way too much considering how much these systems cost to implement these days.

[alshanky]

This was quite an interesting post the OP had up until




Why does everything have to come down to IR35 and how come people know so little about IR35 they have to ask everytime something changes? Boils my piss.

This is your livelihood, how come you know so little about IR35 you have to ask? WTF are you going to do next April when you are deemed inside?

How can you work out complex business situations like this when you can't apply the basics of something that's been around 10+ years? So many people pretending to be a contractor it's unreal.

But that aside... Im struggling to understand the situation with the contract. You say they've made a change to your contract. So they've dropped this on you and presented you with a new contract before the old one has expired with the new terms on it? Have they served notice on the old one or what?

I think it's a case of what Old Greg says... but... I'd play the game regarding contracts to the letter. They can't just give you another one and say here sign this. Make sure they give the proper notice on the old one and you'll sign that when the old one has expired. If they want to do this they've got to make sure it's done properly... unless they are and you've just not explained it clearly.

I know about IR35 regulation but wouldn't call myself to be an expert.

Yes, this has come midway through the current contract. Yes, they have served notice the new contract comes into force from mid Jan.

There is no mention of the 0.65% charges, the rate is just reduced to reflect the 0.65%.

My point is if this is a charge that I would need to bear, I would expect this to be reflected on the contract and I get a proper VAT receipt for the charges I paid. I will claim this as an expense to my business.

[Old Greg]

Or you could accept the reduction and be a lot more careful not to start work early, finish late or skimp on your lunch break.

[Lance]

aside from the other noise in the question.... and if this is taken at face value, a client requested drop in rates of less than 1%, in the financial sector, is not bad news.

The OP needs to make a business decision. Take the cut or risk losing the role.
The only IR35 question they should have right now is what does the SDS say for after April 6th.


and OP should do some research over the rest of the holiday.

[eek]

The efficiency benefit is 0.65%.

The efficiency benefit will be less work for the end client as all the contractor costs are now attached to 1 validated invoice.

[jamesbrown]

presumably it enables some kind of efficiency benefit.

The efficiency benefit is 0.65%.

[Fred Bloggs]

What it's called is irrelevant. It's simply a rate cut by another name. The only choices are suck it up, increase your rate or move on. In the present market I suspect the only real choice is suck it up.

[eek]

What is the fee meant to cover / provide?

It doesn't matter - it's a cost the end client has created that needs to be covered by either the agency or the contractor.

As the agency isn't going to pay it you the contractor will have to pay it.

And if you think this is bad you should see the one I recently got which requested a 3% discount for payment before 90 days on a contract for a upfront payment for a license fee.

So in reality there is nothing you can do when end client throws their weight around - I would just swallow it as the only other option is to find other work.

as for any IR35 impact we won't have a clue except why would you be bringing in a contractor management service before such a big change.

[northernladuk]

This was quite an interesting post the OP had up until

What will be the implications to IR35 applicability of the current contract?

Why does everything have to come down to IR35 and how come people know so little about IR35 they have to ask everytime something changes? Boils my piss.

This is your livelihood, how come you know so little about IR35 you have to ask? WTF are you going to do next April when you are deemed inside?

How can you work out complex business situations like this when you can't apply the basics of something that's been around 10+ years? So many people pretending to be a contractor it's unreal.

But that aside... Im struggling to understand the situation with the contract. You say they've made a change to your contract. So they've dropped this on you and presented you with a new contract before the old one has expired with the new terms on it? Have they served notice on the old one or what?

I think it's a case of what Old Greg says... but... I'd play the game regarding contracts to the letter. They can't just give you another one and say here sign this. Make sure they give the proper notice on the old one and you'll sign that when the old one has expired. If they want to do this they've got to make sure it's done properly... unless they are and you've just not explained it clearly.

[Old Greg]

Assuming you bill 500/d and 22 days a month this is £11000 a month. 11000 * 0.0065 = £71.5 a month. You are going to quabble over 70 quid a month with your client? Are you stupid?

It is the client and agency that are quibbling over this sum. Having said that, I would probably accept the contract change and then hold a grudge forever. Crazy for the agency and client to create this kind of ill will over such a sum for a new system that they should have a business case for - presumably it enables some kind of efficiency benefit.

[oilboil]

Assuming you bill 500/d and 22 days a month this is £11000 a month. 11000 * 0.0065 = £71.5 a month. You are going to quabble over 70 quid a month with your client? Are you stupid?

I would quibble it in an existing contract, in a new contract I'd accept its the cost of taking the business, but for an existing contract with no mention then I'd argue the toss or get them to up my rate by 1% to enable the cut to be taken