Increasing Day Rates inside IR35

[psychocandy]

A few year ago I went to an inside public sector role......

The client in question hiked rates by 35% to accomodate. For me, having to go umbrella this seemed to work out same take-home for me. So I was happy.

[simes]

The very same problem I had with a previous client. Paid in Euros, from NL, still concerned about IR35...

I never got a straight reason from them. All they said was, Compliance.

Compliance with whom, I asked. No answer.

[eek]

I've just started a contract. Agency originally stated that it was outside IR35, but everything they described pointed firmly inside.

I asked for some clarification on some points, and they then went back to the client. Client came back and said that from April they won't engage with PSC's (Suprise Suprise!)

I negotiated up from £550 to £700 p/d (790 euros in fact, but close enough!).

My calculations put that roughly on par, if you remove the spouse as a director benefit of ltd route.

Word on the grapevine is that other contractors with the client were preparing to walk at having to go Umbrella. That helped with the negotiations!

Given that they are paying you in Euros why on earth is the end client concerned about IR35.

[Bodger]

I've just started a contract. Agency originally stated that it was outside IR35, but everything they described pointed firmly inside.

I asked for some clarification on some points, and they then went back to the client. Client came back and said that from April they won't engage with PSC's (Suprise Suprise!)

I negotiated up from £550 to £700 p/d (790 euros in fact, but close enough!).

My calculations put that roughly on par, if you remove the spouse as a director benefit of ltd route.

Word on the grapevine is that other contractors with the client were preparing to walk at having to go Umbrella. That helped with the negotiations!

[northernladuk]

We banded 30 to 35% uplift first time round.

[eek]

The firm would refuse to engage with PCS and only engage with individuals who are through PAYE umbrellas. They dont need to do an in or out assessment.

Call it what you like, global, blanket, PAYE only.

The issue here is one of terminology which really does need to be correct

A blanket decision that everyone is inside IR35 is illegal.

An executive decision from on high that your firm won't work with PSCs is perfectly legal.

You should note that the word IR35 is not stated in that second sentence at all.

HMRC have been very clear about this so I see little reason why we shouldn't be as fussy as they are.

[luxCon]

It can't be a blanket decision - what exactly have they said.

They can do a rule or (just about a client by client) based decision but it can't be global / blanket.

As for how much - you can work out what the tax will be but the real issue depends on what expenses you will need going forward.

The firm would refuse to engage with PCS and only engage with individuals who are through PAYE umbrellas. They dont need to do an in or out assessment.

Call it what you like, global, blanket, PAYE only.

[eek]

hi, im working for a consultancy who are using a blanket decision that all contractors are deemed inside IR35. They are now asking what an increase in day rate would be from contractors. Does anyone have a % that is being used as standard increases? thanks ..

It can't be a blanket decision - what exactly have they said.

They can do a rule or (just about a client by client) based decision but it can't be global / blanket.

As for how much - you can work out what the tax will be but the real issue depends on what expenses you will need going forward.

[ladymuck]

Are you totally sure it's a blanket inside decision? That's against the regulations. Have they assessed roles and said "all roles of type x are inside" and provided a SDS, or have they said "we will not engage with PSCs"? Neither of these are a blanket decision.

You won't be able to claim relief on travel expenses, or any operating expenses if the client expects you to supply all your own equipment, etc. Check who is paying ErNI.

Also, how long have you been with them? It's a bit risky to move outside to inside on a properly assessed role that has an SDS provided. It's safer if they did the "we will not engage with PSCs" approach.

[ShandyDrinker]

Whatever you can get? Seriously though, how long is a piece of string...

Do your own rough calculations using the myriad of contract and umbrella calculators out there on t'interweb.

Factors you should also consider are whether you need to factor in travel/accommodation expenses and so on, while not so important during the pandemic, when the inevitable post lockdown drive to return to offices happens, this could be a big issue for some.

[sussexcontractor]

hi, im working for a consultancy who are using a blanket decision that all contractors are deemed inside IR35. They are now asking what an increase in day rate would be from contractors. Does anyone have a % that is being used as standard increases? thanks ..