Reply to: Cutting out the middleman, working direct?

[jamesbrown]

I would have thought it was simple:-

If you are going direct they are using you to solve a problem they have.

If they are using an agency they are looking at an employee type relationship to solve that problem.

Yes IR35 is an still a possible issue (as is blanket bans on PSCs) but there is clearly a better relationship provided you are on project based work (and subsequent support work is on connected to that project work).

I think we’re saying similar things. It does depend somewhat on industry as to the prevalence of agency work. You can have an agency gig with excellent working practices and a direct gig with terrible working practices, but direct gigs often come about because the company selling the services has a niche and is in control.

[vwdan]

I did, and it is potentially ambiguous. So, going direct does not, in itself, change the profile risk that comes from IR35, but I accept the nature of such engagement may mean other mitigations can be put in place (eg ability to amend the contract).

Yeah, as above - I'm not implying going direct is automatically better. But, like I say, in my case all of my direct work has been ad-hoc, project by project roles with a lot more accountability on time. So downtime that isn't billable, zero equipment provided, a lot more as you'd expect of a consultant. Just better working practices and less having to manage the client and remind them I'm not their permie.

In my case, it's also involved a bit of juggling multiple clients and such. Again, not definitive in themselves (And we all know IR35 is per contract blah blah) but in my case direct is synonymous with being miles away from IR35.

The downside being stupidity like still having a weeks work of work to book in on a project that should have finished back in the summer.

[eek]

Agree. It’s causation vs. correlation. Going direct in itself is irrelevant because the hypothetical contract ignores *all* intermediaries. However, going direct is quite often correlated with good working practices.

I would have thought it was simple:-

If you are going direct they are using you to solve a problem they have.

If they are using an agency they are looking at an employee type relationship to solve that problem.

Yes IR35 is an still a possible issue (as is blanket bans on PSCs) but there is clearly a better relationship provided you are on project based work (and subsequent support work is on connected to that project work).

[jamesbrown]

I did, and it is potentially ambiguous. So, going direct does not, in itself, change the profile risk that comes from IR35, but I accept the nature of such engagement may mean other mitigations can be put in place (eg ability to amend the contract).

Agree. It’s causation vs. correlation. Going direct in itself is irrelevant because the hypothetical contract ignores *all* intermediaries. However, going direct is quite often correlated with good working practices.

[Paralytic]

Re-read that post. It wasn’t just about going direct, rather about ad-hoc work (e.g., see SPL vs. HMRC).

I did, and it is potentially ambiguous. So, going direct does not, in itself, change the profile risk that comes from IR35, but I accept the nature of such engagement may mean other mitigations can be put in place (eg ability to amend the contract).

[jamesbrown]

Why is going direct better for IR35?

Re-read that post. It wasn’t just about going direct, rather about ad-hoc work (e.g., see SPL vs. HMRC).

[eek]

Why is going direct better for IR35?

You may have some control over the contract as the end client knows what they are purchasing.

[Paralytic]

Great for IR35, though.

Why is going direct better for IR35?

[vwdan]

I've done a lot of direct work. All T&M, but no "traditional" contracts - in my world, direct implies ad-hoc. So, generally better rates and a proper B2B relationship, but lots of juggling and less guarantee of work. I've been let down and messed around a lot by projects not starting on time and such.

Overall, there are pros and cons and I can't honestly say I prefer either.

Great for IR35, though.

[coolhandluke]

My first contract was direct with a big fashion retailer in the UK. 90 day terms and £10 per day extra over an agency worker.

[jayn200]

I've had a different experience. Gone direct on 3 contracts. 2 were weekly with 10 day terms, 1 was monthly with 30 day terms. Had 1 or 2 missed/late payments but these were much easier to chase up than when I've had same issues going through an agency.

I prefer to go direct. I'd rather get paid more or be cheaper to the client, both of those benefit me. If I'm cheaper (still making same money) I'll probably be kept on longer and if I earn more well hopefully I don't have to explain why that's beneficial.

I would work direct 100% of the time if I had the choice.

[velcro]

QDOS have a standard contract which is Outside IR35 compliant on their website which you can use. I had to mod this a little to go direct and then had it doublechecked by QDOS.
I still invoice the client every week, and payment terms can be negotiated but 30 days is still very possible. After having delays in payment for the first few weeks, the client soon sorted it out with their accounts and now its like clockwork.
So much better to cut out the agent, and what more the client is making a nice saving so is now talking about an extension.

[darmstadt]

I have 2 contracts which are direct. For one, they asked me to write the contract so I just copied an old one I had, changing the names and that was fine. Stuck in a standard 30 day payment term and am always paid before that so quite happy with it. The other one I don't even have a contract and have been with them for 5 years now, I send in the invoice at the end of the month and am paid, latest, 2 days after. However, I have had direct ones in the past and as people have pointed out, payment can be difficult and chasing it up even more difficult as you have to do it directly with the client.

[Lance]

IPSE provide a reasonable contract template you can use.
See what the client says through. They may insist on their Ts and Cs.

IR35 is unchanged. If anything you’re in a better position as there’s be no agency-client contract that you cannot see and review.

Also ask the client what their view is if April IR35 changes. If they’re a small company it’s not their problem. If not they can’t just ignore it so best to work with them now.

[Eirikur]

Most likely you can forget about weekly invoicing. Payment terms can be up to 90 days and still you will have to chase it