Reply to: Will you increase the rate come 25% on corp tax in 2023?

[TheDude]

presumably the agents will negotiate a rate rise from the client regardless, and just pass a bit of it on to the contractor if he makes enough of a fuss.

Agents will be too busy posting photos of their team wearing inappropriate clothing whilst attending industry functions.

[northernladuk]

presumably the agents will negotiate a rate rise from the client regardless, and just pass a bit of it on to the contractor if he makes enough of a fuss.

How can a contractor can have such little clue about their industry and their streams of income.

[hugebrain]

Unless you're direct and, we dont know because you havent said, the rate increase is probably your agent cutting their already inflated margin rather than the client paying more.

presumably the agents will negotiate a rate rise from the client regardless, and just pass a bit of it on to the contractor if he makes enough of a fuss.

[BolshieBastard]

Thank you all for your input. I just managed a rate increase of 7%!

So, to anyone who is reading this, there is hope and, as always, you don't ask-you don't get. Ask and thou might get!

Unless you're direct and, we dont know because you havent said, the rate increase is probably your agent cutting their already inflated margin rather than the client paying more.

[d000hg]

I mean you'd never say "because I need to pay more taxes", you just ask for an increase. If you need to justify, you mention the value you add and the market rates. That should suffice.

But that value was there before, you should already have it

[northernladuk]

The agent told me that they've discussed this with the end client and that this increase is in line with inflation and other increases across the board of contractors. I don't think the increase was always there as I have asked in the past and they had said that this was the max price. It's also a contract renewal so your point might be valid on the squeeze.

Personally my first though it they are lying. It's what agents do so don't trust anything they say. It is possible but it's very unusual for clients up rates by only 7% and particularly because of inflation. That's a consumer problem not a business one. I've never seen an engagement with a supplier go up for that small amount for that reason. Yes it is possible but it's more likely the agency is just bulltulipting you to make it sound good. Until you see the rate card from the client assume they have given you that out of their commission. If that is the case then that money has always been there to had. You don't ask, you tell them. Of course they are going to say no if you politly ask and they'll always say it's max price. You've got to tell them what you want with the threat of you walking to make them sit up and listen.

I'd be very wary of the excuses the agents are giving you. I could be totally wrong but until I saw the clients rate card I'd assume the increase is from the agent not the client.

[Skag]

Your client is also paying more tax so by this logic, they should be pushing you to cut your rate to protect their bottom line. It doesn't come across as professional in my book.
Inflationary increases you might argue but not "I have to pay more tax I want more money" IMO.

I mean you'd never say "because I need to pay more taxes", you just ask for an increase. If you need to justify, you mention the value you add and the market rates. That should suffice.

[Skag]

That is great news but you should always be pushing for rate rises. Don't kid yourself this is because you the extra tax burdens or cost of living. If they upped the rate then it's always been there whatever external issues are going on. The agent has re-couped the money they spent on selling the role and it's all pure profit to them so better they pay you a bit more out of their comission than you jump ship and they have to start again. Again, this is nothing to do with your tax or cost of living.

So to anyone reading this... Understand if your agent is on fixed comission or not. If they are not then they are taking an arbitary number from your rate to cover their time. If you've got renewals then it's free money for them so squeeze them. Most agents are happy to tell you if it's fixed or not. You shouldn't be looking for a reason you think you need a rate rise, you should be sticking it to them at every renewal until you are sure they don't have any more to give.

The agent told me that they've discussed this with the end client and that this increase is in line with inflation and other increases across the board of contractors. I don't think the increase was always there as I have asked in the past and they had said that this was the max price. It's also a contract renewal so your point might be valid on the squeeze.

[d000hg]

Your client is also paying more tax so by this logic, they should be pushing you to cut your rate to protect their bottom line. It doesn't come across as professional in my book.
Inflationary increases you might argue but not "I have to pay more tax I want more money" IMO.

[northernladuk]

Thank you all for your input. I just managed a rate increase of 7%!

So, to anyone who is reading this, there is hope and, as always, you don't ask-you don't get. Ask and thou might get!

That is great news but you should always be pushing for rate rises. Don't kid yourself this is because you the extra tax burdens or cost of living. If they upped the rate then it's always been there whatever external issues are going on. The agent has re-couped the money they spent on selling the role and it's all pure profit to them so better they pay you a bit more out of their comission than you jump ship and they have to start again. Again, this is nothing to do with your tax or cost of living.

So to anyone reading this... Understand if your agent is on fixed comission or not. If they are not then they are taking an arbitary number from your rate to cover their time. If you've got renewals then it's free money for them so squeeze them. Most agents are happy to tell you if it's fixed or not. You shouldn't be looking for a reason you think you need a rate rise, you should be sticking it to them at every renewal until you are sure they don't have any more to give.

[Skag]

Thank you all for your input. I just managed a rate increase of 7%!

So, to anyone who is reading this, there is hope and, as always, you don't ask-you don't get. Ask and thou might get!

[SussexSeagull]

Rate increases will be a very hard battle to win over the next couple of years.

[northernladuk]

I wish I could but I can't. I negotiate as best I can already and I'm absolutely sure me increasing my rates won't make a blind bit of difference as the clients rate cards won't change. You are assuming the client is willing to pay your increased rates, which they won't. Their corp tax is going up, their perms expect more money, they are getting hit hard for gas/electric. A one man contractor rocking up with a rate raise just because their tax has gone by a few percent is going to fall on very deaf ears.

We are a slave to the clients rate cards, not the other way around and looking at the hits the clients are taking I can't think for one minute they are gonna move.

[Skag]

I define "easy money" as in they can put the legislation in place and get the money -tomorrow. No push backs whatsoever and still ends up in gov's pocket.

There's a good chance it will lose tax income rather than increase it over the next few years.

Of course, that's always the consequence of high taxation; less spending and more money under the table/corruption.

[malvolio]

Both good points, thanks.

Do you really feel that we might see changes still until Apr 23? To me, the change to 25% seems like "easy money" for the gov, as in "it was going to happen anyway" and not a whole lot happened when it was announced in the first place.

Don't think it's easy money. It's as likely to discourage inward investment as it is to increase tax revenues, something this chancellor and his Treasury-conditioned boss seem determined to ignore. There's a good chance it will lose tax income rather than increase it over the next few years.