Reply to: Client altering assignment rate due to Health and Social Care / NICs U-Turn

[NotAllThere]

I understand now. Most likely the agency trying it on.

I would talk to the client's hiring manager directly and ask if he is aware of your rate change. If this comes from the agency you have a very good chance to continue on your current rate.

Exactly this. The hiring manager might say yes... because the agency are charging him more for the same spurious reason.

[NotAllThere]

Any concrete advice?

Yes. Don't try to expense an intergalactic cruise in your office.

[zonkkk]

That's my issue. I should be getting more in my pocket, not less.

I understand now. Most likely the agency trying it on.

I would talk to the client's hiring manager directly and ask if he is aware of your rate change. If this comes from the agency you have a very good chance to continue on your current rate.

[zcapr17]

Unless you have NET rate in the contract I don't see what the problem is?

You agreed on an inside IR35 rate.

Yes, a gross assignment rate, with the client, to be paid to my umbrella.

They retain your taxes.

The client doesn't, my umbrella do.

Taxes went up by 1.25%.

No they didn't. Employer and Employee NICs have in fact both just gone down by 1.25% (as of 6th Nov).

You get less money in your pocket.

That's my issue. I should be getting more in my pocket, not less.

[Zarniwoop]

Unless you have NET rate in the contract I don't see what the problem is?

You agreed on an inside IR35 rate. They retain your taxes. Taxes went up by 1.25%. You get less money in your pocket.

Like everybody else even outside contractors who pay themselves dividends. Wait until after April when corporation tax goes up too... let's all moan and ask for a rate change mid contract.

Client -> Agency -> Umbrella (my employer) -> Me

The problem is that the agency have seemingly decided them to grant themselves a bit extra per day at my expense. This is a 4-month contract and in September we agreed a specific daily rate, based on precise knowledge of what the client were going to pay and how much of that was VAT. The umbrella calculates my NI, taxes, not the agency - I don't see how it's any of the agency's business.

Do I get to pay less to every supplier of services because they're now paying less NI? I'm not an employee of the agency, and as far as I know they pay my umbrella as a supplier.

Still awaiting a call from the agency to explain this.

Interesting to see that others have encountered similar. I just got a KID from the them (a week late!) which shows my weekly rate unchanged, contradicting the revised contract they sent out. So maybe it's just incompetence...

Paul

[gables]

Interesting reading this as the same is being tried with me i.e. reduced day rate by 1.25%. In conversations with the agency (Lorien) they have told me my client (a bank) included an uplift in my rate which catered for the initial rises, in fact apparently both employee and employer so 2.5%. And now the NICs are reducing so the rates are going to as well but only the employers bit hence 1.25%

This was never explained to me when I signed the contract which was after the rises being implemented and as such I see this as a straightforward rate decrease, albeit small. They're implementing the decrease after my contract ends; so for the extension, which has been offered, I'll be looking for the day rate I'm currently on - so we shall see what comes of that.

[zonkkk]

Unless you have NET rate in the contract I don't see what the problem is?

You agreed on an inside IR35 rate. They retain your taxes. Taxes went up by 1.25%. You get less money in your pocket.

Like everybody else even outside contractors who pay themselves dividends. Wait until after April when corporation tax goes up too... let's all moan and ask for a rate change mid contract.

[eek]

I suspect any agency pulling this trick is going to be in for a surprise as NI rates are once again hiked in the autumn statement.

especially if the increase is 2% rather than the 1.25% that was introduced in April and just removed.

oh should say my agency is pulling this trick, but given the amount of ammunition I already have on them (lack of KID…) the employment tribunal next year will be fun

[Peoplesoft bloke]

Unfortunately agents will try anything. They wanted to pay me 21 days after invoice each month for an inside IR35 gig - lucky for me I have a bit of leverage so we have settled on me getting paid weekly, 7 days after invoice*. We recently had an e-mail from the boss of the agency saying anyone on 21 days would be switched to 30 days from December - glad I was in a position not to accept their terms, but of course it doesn't apply in every case. We are employees for tax purposes but stiffed in every other way agencies can think up.

*I fully expect to be stiffed on the final week, when I can't use a threat to walk any longer.

[Protagoras]

Any concrete advice?

Nope, you either accept this, or need to be prepared to walk away as stated above.

However,
- Did the Assignment Rate increase when the NI levy was introduced?
- Could you stall any agreement pending the Autumn Statement?

It seems odd to me that clients would want to annoy workers over what is a relatively small amount of money - it's hardly going help when they may need workers' goodwill to resolve some problem or other.

[Zarniwoop]

Same advice applies to you I’m afraid.

Yeah I figured. However the agency has not yet been able to articulate their logic, leaving me guessing. I see three possibilities:

1. They've genuinely screwed up and my contacts at the agency don't understand it properly
2. They've taken the opportunity to take a bigger cut for themselves of what my client sends them, with the justification that I won't take home less
3. The client has started paying them less for me and nobody told me

Suspect that it's #2, in which case I'll have to make a choice. The client is public sector, if that makes any difference.

Paul

[cojak]

Same advice applies to you I’m afraid.

Your client is trying it on.

This is a change of contract, but you may not have any other leverage to fix other than terminating the contract and walking away.

It doesn't matter whether it's commonplace or not though does it?

You have 3 options and only 2 outcomes.:

• Suck it up buttercup
• Tell them you won't accept that. You will likely end up sucking it up, or
• walk away

[Zarniwoop]

Hello,

I've just registered as I've been looking for advice on this - the exact same thing has happened to me. Email discussions with the agency have been fruitless - I expected them to acknowledge a mistake but it seems as far as they're concerned lowering my daily rate (without my agreement) is ok/necessary due to the drop in NI.

So in the loop is Client -> Agency -> Umbrella -> Me

1. Got a revised contract from the *umbrella* company, with a lower daily rate, sent to them by the agency. First thing I knew about any of this
2. Queried the agency - they said that NI is dropping by 1.25%. "This will not affect your PAYE rate as this is staying the same, is it the ENIC figure that will be decreasing"
3. Me - so why do I have a new contract? The umbrella calculates NI, tax, etc, not the agency. Surely agency just pays the agreed daily rate to the umbrella as a supplier.
4. Much back and forth - they sent me before/after illustrations showing I'd be better off, but both illustrations had my original daily rate.
5. Now the manager at the agency is gonna call me on Monday (they didn't refute what I saids, but haven't confirmed their logic either).

To be clear, the change in rate isn't huge, however it wasn't agreed with me or the client. Can agencies unilaterally decide to reduce your pay? Regardless of whether it all works out the same, I should see the benefits of a decrease in NI right?

I can only assume the agency is not competent enough to know that my NI rates are not their concern, OR, they're chancing it and hoped I wouldn't notice.

Any concrete advice?

Thanks,

Paul

[Protagoras]

FCSA mentioned this a few days ago ...

https://www2.staffingindustry.com/en...rate-cut-63624

[Lance]

I'm looking to understand if it's common practice for clients to be adjusting assignment rates for umbrella workers due to changes in NI and tax rates? Or is my client trying in on?

It doesn't matter whether it's commonplace or not though does it?

You have 3 options and only 2 outcomes.:

• Suck it up buttercup
• Tell them you won't accept that. You will likely end up sucking it up, or
• walk away