Reply to: Contracting directly?

[redman123]

Dont disagree with you there

[northernladuk]

According to my umbrella they uplift your month salary to include the holiday pay in your salary, hence I do not take any hols unnecessarily (i.e. for the sake of using up 25d like permies). Agree its important for MH.
Unfortunately I do not know the gap period of that person before rejoining. I will ask next time if it doesn't sound too intrusive.
and to answer the above very recently.

YOu seem fixated on Umbrellas here. Don't want to be rude but there seems to be a certain level of naivity in your approach to this. You've a lot to learn before you can piece together the complexities of direct and the issues that come with it.

Don't get hooked up on other peoples tales and get all dollar eyed and greedy. Understand what you do first, your clients, and general business.

[edison]

There is no way a bank is going do deal with hundreds of permietractors directly so forget about it.

You will have to get used to dealing with agents and accept that there is no way that you will ever know what you are costing the bank per day.

I am so used to dealing with agents I swear I can smell the aftershave before my phone even starts ringing.

It's too much of an admin burden for most organisations, especially risk averse ones like banks, to have to in effect manage dozens or hundreds of suppliers.

If you want to go direct then small to medium businesses are generally the ones to target in my experience. My last two contracts have been direct where I was brought in by CIOs who I knew well and had worked with before. In other words, unless you are more like a small consultancy (and I'm not), then networking is most likely to be the most successful method.

In both above contracts, the organisation had a turnover of around £100m and used agencies for contractors - I was the only one to come direct as far as I now. I am not a techie as such and am more of an IT jack of all trades, but I was able to jointly develop a Statement of Work with deliverables and milestones that the CIO approved.

[redman123]

Your story of the first person who was on a contract outside IR35, left that contract and agency/consultancy and then rejoined directly - was there a break of several months or more between them leaving and rejoining?

Umbrellas take a deduction from your rate for holidays so that when you take time off (which you really should do for the sake of your health and personal relationships), you still get a salary paid to you. When you work through an umbrella, you are working as an employee of that umbrella. That's how it works and that's why you get holiday pay.

According to my umbrella they uplift your month salary to include the holiday pay in your salary, hence I do not take any hols unnecessarily (i.e. for the sake of using up 25d like permies). Agree its important for MH.
Unfortunately I do not know the gap period of that person before rejoining. I will ask next time if it doesn't sound too intrusive.
and to answer the above very recently.

[TheDude]

Just wondering how it works for people contracting direct with clients for example, a bank

There is no way a bank is going do deal with hundreds of permietractors directly so forget about it.

You will have to get used to dealing with agents and accept that there is no way that you will ever know what you are costing the bank per day.

I am so used to dealing with agents I swear I can smell the aftershave before my phone even starts ringing.

[WTFH]

The person was on a contract outside, left and rejoined directly. Presume this is not via ltd co and not connected to the 7 years comment. I should have clarified.

The other person I spoke to we didnt discuss umbrella margins that was my own rough calc. They have been working for 7 years as a contractor

I found it odd they said they had to take holidays or it gets lost. Like a permie but not one for sure. Why not let the umbrella add it to your pay. Hey ho

Your story of the first person who was on a contract outside IR35, left that contract and agency/consultancy and then rejoined directly - was there a break of several months or more between them leaving and rejoining?

Umbrellas take a deduction from your rate for holidays so that when you take time off (which you really should do for the sake of your health and personal relationships), you still get a salary paid to you. When you work through an umbrella, you are working as an employee of that umbrella. That's how it works and that's why you get holiday pay.

[WTFH]

Just wondering how it works for people contracting direct with clients for example, a bank

Forgive my ignorance but is it as simple as it sounds as most other consultants go via umbrella and an agency so direct would mean a better rate for the contingent worker?

Can I ask how long you've been contracting for?

[eek]

I found it odd they said they had to take holidays or it gets lost. Like a permie but not one for sure. Why not let the umbrella add it to your pay. Hey ho

Because some umbrellas make a LOT of money from stealing unused holiday pay.

[redman123]

The person was on a contract outside, left and rejoined directly. Presume this is not via ltd co and not connected to the 7 years comment. I should have clarified.

The other person I spoke to we didnt discuss umbrella margins that was my own rough calc. They have been working for 7 years as a contractor

I found it odd they said they had to take holidays or it gets lost. Like a permie but not one for sure. Why not let the umbrella add it to your pay. Hey ho

[WTFH]

Thanks all for the replies. It was asked on the back of a small conversation I had in passing with someone.
For the person I had in mind this is the closest match. He did mention that he was referred by the line manager after the IR35 thing. In essence he left and rejoined “directly” and skillset is an ordinary PM nothing special!

It may be he’s extremely lucky but in terms of processing would he not still go via umbrella or is a preferred supplier doing his PAYE?

I also recall someone else saying they are paid via PAYE and do not pay Umbrella fees so they have to take holidays for holiday pay but are a contractor. (even though umbrellas will do this for you and their margin is at approx 88 p/m - they said they couldnt get an uplift in rate anymore as its maxed out, to cover their “fees” - why would you?) on another note I would call this other person extremely lucky to have been there for 7 years!

It’s hard to tell from your story but to have “left and rejoined directly” do you mean he used to be permanent with the bank and then came back as a contractor a few days/weeks later, or was he already contracting through another way? The fact that he was there for 7 years would imply he’s effectively a permanent employee and not really a contractor at all.

If the role is inside IR35, then you must go via an umbrella.
If the role is outside IR35, then you will have options to go via your own Ltd

I’m intrigued by how your “small conversation” included the margin a particular umbrella was making, but just as a thought, £88 per month is less than an accountant will charge to do the finances for your own Ltd, and your friend may not have told you all the joys of running an Ltd.

And one final thing, we used to have a poster on here who was a PM at a bank and obsessed with rates, but most of his stories were hypothetical or made up, and he was always very light on the relevant facts, so I’d take anything anyone tells you with a pinch of salt.

[redman123]

I’m direct, was through recommendation (so very lucky!). It’s outside IR35 for a small company, even had to provide the contract. I’ve only had one other direct contract and that was actually through Jobserve many years ago, again a small company. I can’t see many contractors getting direct work with any of the banks these days tbh.

Thanks all for the replies. It was asked on the back of a small conversation I had in passing with someone.
For the person I had in mind this is the closest match. He did mention that he was referred by the line manager after the IR35 thing. In essence he left and rejoined “directly” and skillset is an ordinary PM nothing special!

It may be he’s extremely lucky but in terms of processing would he not still go via umbrella or is a preferred supplier doing his PAYE?

I also recall someone else saying they are paid via PAYE and do not pay Umbrella fees so they have to take holidays for holiday pay but are a contractor. (even though umbrellas will do this for you and their margin is at approx 88 p/m - they said they couldnt get an uplift in rate anymore as its maxed out, to cover their “fees” - why would you?) on another note I would call this other person extremely lucky to have been there for 7 years!

[jamesbrown]

I can’t see many contractors getting direct work with any of the banks these days tbh.

True, there are some industries where procurement policies are such that you need to be even more niche/in-demand or lucky to get direct work. Direct BAU-type coding work at a bank is going to be pretty rare nowadays unless you're in the "lucky" category and, even then, I doubt it.

[gixxer2021]

I’m direct, was through recommendation (so very lucky!). It’s outside IR35 for a small company, even had to provide the contract. I’ve only had one other direct contract and that was actually through Jobserve many years ago, again a small company. I can’t see many contractors getting direct work with any of the banks these days tbh.

[jamesbrown]

Pretty much everything in contracting is driven by supply and demand, unsurprisingly. If you're in high demand, you dictate the terms. If you're in large supply, you don't. The only thing you can do to fix that balance is to work on your skillset and/or your contacts, but the latter normally comes with the former.

[jamesbrown]

The contractors direct are likely to be either very lucky or part of a group offering as solution to the client, not bums on seats.

Basically, this. Lucky (e.g., contact that is involved in procurement at the client or on their board), niche skillset or selling services as part of a larger consortium, or both of the last two.