Reply to: Rate increase?

[andymalory]

The way to think about this is how would an SME of say 20 people behave when faced with a similar situation? A few suggestions to consider below:

1. Consider adding benchmarking clauses to your contracts that state you have the right to benchmark every 12 months, and if the market has moved, you reserve the right to adjust the rate.
2. Add inflation clauses to rates.
3. Look at taking on another 1-2 clients, if only for the sole purpose of being able to state that other clients are absorbing your capacity and attention due to higher margins - its simply becoming a more competitive market.
4. Look to introduce long-term discounts from the current rates.

[PerfectStorm]

So if you got an interview followed by a better offer - would you serve your notice on current contract?

Have been doing this but it seems agents are usually put off when they know or think you're currently engaged.

Tell them you're available then. After all - something could come up in the interim. A plumber doesn't refuse work because you've asked them about the mere possibility of fixing your bath in a months time.

In comparison with the lies that are told by every recruitment agency to some degree, it's nothing and there's nothing they can do about it. You'll know when you're about to receive a contract, and you could serve notice then or work both during the cutover. You'll probably be waiting 2 months for your laptop anyway.

[ladymuck]

So if you got an interview followed by a better offer - would you serve your notice on current contract?

Have been doing this but it seems agents are usually put off when they know or think you're currently engaged.

How have you switched contracts in the past? Do you let them end and then only start looking for the next one when benched?

How long is your notice period? Any more than two weeks is usually too long unless the agent knows the client has a lengthy onboarding process.

[edison]

This thread seems to have gone off topic. The question is about a rate increase.

You probably can justify a rate increase; I suspect however they'll knock you down to a modest rise. Generally it is much easier to get a substantial rate increase by getting a new contract. I would put feelers out, talk to agents and get interviews. That way you'll find out your market rate.

Err, that's more or less what I said just a couple of posts earlier in the thread

[SoleTrader]

This thread seems to have gone off topic. The question is about a rate increase.

You probably can justify a rate increase; I suspect however they'll knock you down to a modest rise. Generally it is much easier to get a substantial rate increase by getting a new contract. I would put feelers out, talk to agents and get interviews. That way you'll find out your market rate.

So if you got an interview followed by a better offer - would you serve your notice on current contract?

Have been doing this but it seems agents are usually put off when they know or think you're currently engaged.

[BlasterBates]

This thread seems to have gone off topic. The question is about a rate increase.

You probably can justify a rate increase; I suspect however they'll knock you down to a modest rise. Generally it is much easier to get a substantial rate increase by getting a new contract. I would put feelers out, talk to agents and get interviews. That way you'll find out your market rate.

[edison]

Was a sole trader, went Ltd before this contract.

That's fine, but all the more reason to start adopting more of a limited company and supplier mindset.

[SoleTrader]

You beat me to it

Was a sole trader, went Ltd before this contract.

[edison]

Surely as a contractor you have some idea of the value of your skills and market worth so you can test the water elsewhere, look for other roles and/or negotiate a higher rate?

Looking for '18 months security' totally makes you sound like a permie unfortunately.

Personally, anything over two years is akin to a perm role for me; one of the benefits of contracting is to work in different organisations and sectors.

[Snooky]

Neither because you're a sole trader?

You beat me to it

[jamesbrown]

Outside, because I can provide a substitute?

Neither because you're a sole trader?

[northernladuk]

Just out of interest, how long would we be allowed in this case? Where is the line drawn? 3 months, then we have to find a new contract? Should we just give it up and go permanent?

For me it's a couple of years tops but will highly depend on the client and the way the contractor acts. It gets harder and harder to protect your IR35 status as you become more part and parcel of the organisation. If you stick rigidly to the rules, move around different areas of the business, get SOW for every new piece of work and so on you could potentially stay outside for longer. But your average bum on seat doing same job at the same client is going to be a year to two tops IMO.

Still doing the same job really, writing the same code, haven't changed roles. I just get asked more questions now from permies, rather than me asking them. Are contractors not allowed to collaborate with permies on a project?

And there is the issue. Doing the same job. Permies have jobs. You have packages of work to deliver. You sitting there doing the same 'job' as the perms, workign in exactly the same way makes you a disguised perm which is what HMRC thinks and I would argue are actually right in some situation.
You can calloborate with them but there is a clear line between supplier collaborating with a client and you being there so long they just see you as part of the team. You say many people have left. No one that has joined since will see you as a contractor if you've been there that long.

Company is definitely classed as a micro company to HMRC. A lot of people have left, a lot have joined, it could have gone over 50 but not by much. Point is, they don't qualify as bigger than a micro company due to annual revenue not exceeding £10.2million or the balance sheet total being more than £5.1m - you can still be doing very well as a company and not reach those numbers. Due to this classification, IR35 status responsibility is with me.

That's true and as long as they have then yes you are right but.... I'm highly suspicious of outside gigs in these environments. They are too small to be able to issue detailed SOW's that you can't deviate from else D&C kicks in. You'll just be feed work as the last ends under a 4 year unchanged contract. HMRC will see that as a job. Have you delivered a new statement of work for each new delivery? Signed off when complete and then create another for the next piece? If not you cannot demonstrate that you haven't been doing anything else the client wants which is D&C and a job. They will treat you like a perm. You finish one piece of work and the client will expect to give you more work and you sound like you expect it to be given to you so your MoO (or lack thereof) is blown.

However your very final point I do agree with, and I can look for an increased day rate and achieve what I'm trying to get that way. However when you say proper contractor what do you mean? Inside or outside?

Your IR35 status doesn't affect your status as a good contractor. I mean proper contractor as in someone that knows what they are in the chain, knows their business and understand their client. Not someone that is sitting pretty and clueless in a client thinking they are a contractor when they are just a disguised permie.

[SoleTrader]

Not a chance you are outside. 4 years in a small company working in different roles and increasing your capabilities to a new role is not outside by any stretch. You are inside all day long. Your working practices and clear D&C will blow any sham substitute clause out the water. The only contractor speaks volumes (because they don't see you as that) and so on. The whole post reads like a disguised permie to me. Situationtions like this is exactly why IR35 was invented. Highest paid in the co.? No you aren't as you aren't paid, you charge your client so you shouldn't be comparing pay to the perms. The fact you don't want to do business with your client adds to this permie mentality.

Point of note as well the small company exemption is for UNDER 50 people, not 50 people ish. Are you sure in the 4 years you have been there they haven't blown through the other two criteria. Not much of a company if it's not grown in that time.

IMO you need to leave because your outside status is screwed and now you've got the skills you need to let go and be a proper contractor.

Just out of interest, how long would we be allowed in this case? Where is the line drawn? 3 months, then we have to find a new contract? Should we just give it up and go permanent?

Still doing the same job really, writing the same code, haven't changed roles. I just get asked more questions now from permies, rather than me asking them. Are contractors not allowed to collaborate with permies on a project?

Company is definitely classed as a micro company to HMRC. A lot of people have left, a lot have joined, it could have gone over 50 but not by much. Point is, they don't qualify as bigger than a micro company due to annual revenue not exceeding £10.2million or the balance sheet total not being more than £5.1m - you can still be doing very well as a company and not reach those numbers. Due to this classification, IR35 status responsibility is with me.

However your very final point I do agree with, and I can look for an increased day rate and achieve what I'm trying to get that way. However when you say proper contractor what do you mean? Inside or outside? How long are the contracts to be determined a proper contractor?

[northernladuk]

Outside, because I can provide a substitute?

Not a chance you are outside. 4 years in a small company working in different roles and increasing your capabilities to a new role is not outside by any stretch. You are inside all day long. Your working practices and clear D&C will blow any sham substitute clause out the water. The only contractor speaks volumes (because they don't see you as that) and so on. The whole post reads like a disguised permie to me. Situationtions like this is exactly why IR35 was invented. Highest paid in the co.? No you aren't as you aren't paid, you charge your client so you shouldn't be comparing pay to the perms. The fact you don't want to do business with your client adds to this permie mentality.

Point of note as well the small company exemption is for UNDER 50 people, not 50 people ish. Are you sure in the 4 years you have been there they haven't blown through the other two criteria. Not much of a company if it's not grown in that time.

IMO you need to leave because your outside status is screwed and now you've got the skills you need to let go and be a proper contractor.

[SoleTrader]

You inside IR35 or outside?

We know the answer, just wondering what you think you are.

Outside, because I can provide a substitute?