Reply to: Basic question on contractor pay rates and tax

[SueEllen]

Cfl you were supposed to be kind

[clearedforlanding]

Agents lie like all sales people but within their lies an amount of what they say is the truth.

Absolutely, when they say I am the best candidate they are submitting, I know it to be irrefutable.

[SueEllen]

Right so NLUK starts off with a similar comment about me but you choose to pick up on my comment.

I wonder why that is?

Ignore anything Hays say to you. It will be a lie.

How is this going to help the OP when they have work with the agent?

Agents lie like all sales people but within their lies an amount of what they say is the truth.

[SlipTheJab]

Right so NLUK starts off with a similar comment about me but you choose to pick up on my comment.

I wonder why that is?

Didn't you know that CUK is the NLUK and SE show!

[psychocandy]

Actually your comment was particularly unhelpful.

The OP needs to ask the agent questions to check what type of contract s/he has.

Then and only then will s/he be able to work out the parts that are true, the parts that are half true and the parts that are damn lies.

The ratio this is depends on how you question them and your own knowledge.

Right so NLUK starts off with a similar comment about me but you choose to pick up on my comment.

I wonder why that is?

[LisaContractorUmbrella]

I think most of the replies agree I need to do more homework on the options I have before signing the contract and that's what I am doing.

Thanks for the advice and to be honest I don't think what Hays offered was anything sinister or misleading, they are just 'acting' between me and the Client and mentioned about the different pay types I can get and its up to me to do more research.

SueEllen - thanks for advice and yes they did offer me a list of umbrella companies but also said its all upto me.

What confused me was the 2 rates they gave me, premium and basic and I think when I contact umbrella I should be using the Premium rate (13% higher)

If the rate that they are offering you to work through an umbrella company is only 13% higher than the rate they are offering you through their own PAYE model then you could actually be worse off. The contract rate multiplied by your hours/days worked will be invoiced by the umbrella company to the recruitment agency - when payment is received the umbrella company will retain their margin (usually £25-£30 per week) and then they also have a legal obligation to pay employer's NIC's which are 13.8% of earnings over and above a threshold.

It may be that you are entitled to tax relief on some of your expenses but there are no guarantees as it depends on your circumstances and it is highly likely that they would only be allowable until April next year anyway. Hays have a closed PSL which means that you will have no choice in the umbrella company you use - it must be one of those on their preferred suppliers list.

Look very carefully at the options that you have available to you before making a decision to accept the contract i.e. read the small print

[SueEllen]

Ignore ALL of what this poster says. Hes got a small willy and thinks he knows it all.

Actually your comment was particularly unhelpful.

The OP needs to ask the agent questions to check what type of contract s/he has.

Then and only then will s/he be able to work out the parts that are true, the parts that are half true and the parts that are damn lies.

The ratio this is depends on how you question them and your own knowledge.

[northernladuk]

Ignore ALL of what this poster says. Hes got a small willy and thinks he knows it all.

OP Refer back to my previous comment.

[psychocandy]

Another piece of advice. Ignore most of what this poster says.. HTH

Ignore ALL of what this poster says. Hes got a small willy and thinks he knows it all.

[pr1]

I think most of the replies agree I need to do more homework on the options I have before signing the contract and that's what I am doing.

Thanks for the advice and to be honest I don't think what Hays offered was anything sinister or misleading, they are just 'acting' between me and the Client and mentioned about the different pay types I can get and its up to me to do more research.

SueEllen - thanks for advice and yes they did offer me a list of umbrella companies but also said its all upto me.

What confused me was the 2 rates they gave me, premium and basic and I think when I contact umbrella I should be using the Premium rate (13% higher)

My guess (note, guess!) would be that that's the difference between accruing holiday days and not

13% is about 34 (paid) days off out of a possible 260 working days (52*5), which given 8 bank holidays, is 26 days off of your choice, sounds feasible

The higher rate probably means you'll get paid £0 for "days off" - so it seems like if you're planning on working more than 226 days (45 weeks), i.e. taking less than 34 days off, then it's worthwhile opting for the higher rate

Definitely speak to them and read the small print before you sign anything though

[Liver]

I think most of the replies agree I need to do more homework on the options I have before signing the contract and that's what I am doing.

Thanks for the advice and to be honest I don't think what Hays offered was anything sinister or misleading, they are just 'acting' between me and the Client and mentioned about the different pay types I can get and its up to me to do more research.

SueEllen - thanks for advice and yes they did offer me a list of umbrella companies but also said its all upto me.

What confused me was the 2 rates they gave me, premium and basic and I think when I contact umbrella I should be using the Premium rate (13% higher)

[northernladuk]

It sounds to me like the OP is employed via the Hayes 'employed contractor model.' A number of agencies do this now and sell it to former employed people turning to contracting as being the 'best of both the employed and contracting world' because they are 1, always in work, 2, get holiday pay and 3, get paid while between assignments.

They sell it to clients as having a pool of 'talent' readily available to come in and do the work at lower cost than their supplied contractors.

What it means is you only get to work for Hayes clients and have a far lower 'rate' than a pukka contractor.

Adecco tried introducing it at a former client when i was there. The 'rate' was piss poor and equated to around 30 grand a year. Not surprisingly, no one took up the offer.

I dont know what Hayes' best option is for the OP but, Id tell him to forget this option and go contracting properly. This will mean rejecting the current offer as Hayes wont change from their model to a contract one in this instance.

This. They used to do this at Barclays quite a lot. Not sure if they still do. Just be warned although it sounds like there is a bit more security there isn't. They will bin you a month after you've been on their bench if you can't find anything, which you probably won't be able to under that model. It's a bit of a pisstake where they are trying to take some of the contracting gigs going which is a bit off as they are the ones resourcing these gigs. Like cherry picking...

They've been at it for years. Here one of quite a few threads from 2012...

http://forums.contractoruk.com/busin...been-sent.html

[northernladuk]

OP - One piece of advice. Ignore anything Hays say to you. It will be a lie. They WILL be looking out for themselves only and not you.

Another piece of advice. Ignore most of what this poster says.. HTH

[SueEllen]

If it is the "employed contractor model" you may as well work for a proper consultancy as you will have more support, better benefits and more likely better pay.

Alternatively become a contractor properly.

Hayes may have stuck some clauses in your contract so if you signed it take legal advice to establish your actual status so you can get out of it. This is because the agent will threaten to sue you if you decide now to turn down the role. However as you are an employee or an agency worker they cannot do this.

[BolshieBastard]

It sounds to me like the OP is employed via the Hayes 'employed contractor model.' A number of agencies do this now and sell it to former employed people turning to contracting as being the 'best of both the employed and contracting world' because they are 1, always in work, 2, get holiday pay and 3, get paid while between assignments.

They sell it to clients as having a pool of 'talent' readily available to come in and do the work at lower cost than their supplied contractors.

What it means is you only get to work for Hayes clients and have a far lower 'rate' than a pukka contractor.

Adecco tried introducing it at a former client when i was there. The 'rate' was piss poor and equated to around 30 grand a year. Not surprisingly, no one took up the offer.

I dont know what Hayes' best option is for the OP but, Id tell him to forget this option and go contracting properly. This will mean rejecting the current offer as Hayes wont change from their model to a contract one in this instance.