Reply to: Agency or direct ?

[boredsenseless]

Go limited

Get a new supplier agreement contract - basically says you'll invoice them they'll pay you and no-one will tell any secrets to nasty people. No definition of activity or anything - this means

a) There is no contract of work, only a contract of understanding of the terms of business should the parties work together in the future

b) No guarantee of work from the contract alone hence no IR35

And most importantly get your work given to you via Purchase Orders and not contracts. You can't have mutality of obligation (MOO) if all that is in place is a contract of understanding and a purchase order enabling you to invoice up to a certain amount.

FInally this builds up a credit record as a supplier to a business (not an agency) whcih should you ever want credit in the future is invaluable.

You are in a position which most of the guys on this board would kill for don't let it slip you by. If you go direct and ltd if they need more resource then you can supply it as you are already on the purchasing system.

[hyperD]

Presumably going direct is not the only IR35 factor; if it were I would imagine that agencies would have a hard time making a living ?

Going direct gives you the opportunity to try and ensure your contract doesn't fall under any IR35 pointers, that's all. It may mean that you are able to have someone like Accountax write the contract for you. You may even find the client is happy just by generating a standard supplier contract with a purchase order.

Your quote regarding agencies here is not correct: agencies exist because they are in the business of recruitment, factoring and finding leads - IR35 doesn't enter into it and simply is an annoying, voluntary tax targetted on personal service type companies.

(Sorry I'm not explaining myself well - I've got a splitting hangover this morning...)

[Mordac]

Guys, guys; I really appreciate the advice; and given that you are all saying the same thing it seems hard to ignore.
However, all you know about my prospective contract is that I am negotiating direct - how can you be so sure it will be / can be made to be IR35 safe ?? Presumably going direct is not the only IR35 factor; if it were I would imagine that agencies would have a hard time making a living ?

And as to using a brolly - this is my first contract. The idea of contacting has been nagging at the back of my mind for over 5 years now, and its time to bite the bullet and give it a go before I go insane. I thought that for the first 6-12 months, using a brolly woulod be a good idea, as if this does not work out for me for whatever reason, I can just walk away from it; rather than having to had to create a Ltd with all the associated paperwork, choosing accountants etc etc, and then having to disolve it etc.
I know its a faily negative view, but thats the way I see it at the moment ..... convince me otherwise ....

Go to http://calculator.contractoruk.com/ and see what the difference is. Then subtract about 3% ish for brolly fees.
Then imagine that amount of money in your hand. Then imagine setting fire to it. At wildish guess you'll be losing between 20-25% annually to Gordon and the brolly. Your choice, of course.
The point about avoiding the agency (and it's not the route I'd choose, personally, but then I have an agency who I trust and also do additional private work for, so I'm probably in a better position than many) is that you are able to insert the necessary clauses in the contract (substitution etc) and more importantly, there is no agency-client contract in the mix. This can often cause problems because we never get to see that contract.
I appreciate it's your first contract, but setting up and running a ltd company really isn't that difficult. Why pay a brolly (who add no value whatsoever) when you can pay an accountant a similar amount and he looks after everything for you?

[Jakes Daddy]

Guys, guys; I really appreciate the advice; and given that you are all saying the same thing it seems hard to ignore.
However, all you know about my prospective contract is that I am negotiating direct - how can you be so sure it will be / can be made to be IR35 safe ?? Presumably going direct is not the only IR35 factor; if it were I would imagine that agencies would have a hard time making a living ?

And as to using a brolly - this is my first contract. The idea of contacting has been nagging at the back of my mind for over 5 years now, and its time to bite the bullet and give it a go before I go insane. I thought that for the first 6-12 months, using a brolly woulod be a good idea, as if this does not work out for me for whatever reason, I can just walk away from it; rather than having to had to create a Ltd with all the associated paperwork, choosing accountants etc etc, and then having to disolve it etc.
I know its a faily negative view, but thats the way I see it at the moment ..... convince me otherwise ....

[Mordac]

I concur with DumPrawn's advice - I also use Darren as my accountant and I highly recommend him (even if he is a geordie)

I'm using Darren as well. There you go, that's 3 recommendations. And we're not even on commission. (Must do something about that )
Anyway, don't be a wally. Go limited.

[eternalnomad]

Jake.

STOP!!!!

email [email protected]

He will set you up a ltd company, help you get setup and open a business account and maximise your take home pay.

DON'T THROW GOOD MONEY DOWN THE PAN

GO LTD!!!

I concur with DumPrawn's advice - I also use Darren as my accountant and I highly recommend him (even if he is a geordie)

[DimPrawn]

Jake.

STOP!!!!

email [email protected]

He will set you up a ltd company, help you get setup and open a business account and maximise your take home pay.

DON'T THROW GOOD MONEY DOWN THE PAN

GO LTD!!!

[DodgyAgent]

This might be a bit volatile for a first post, but the only reason why you wouldn't run a limited company in this instance is pure and utter lazyness. You are just throwing money down the drain. If you cannot be bothered then get someone else to do the running for you. There are lots of people that can do that for you! Some of us that are caught by IR35 are so jealous of you having that business situation. You should definitely take advantage while you can. If you do have to go through an agency make sure that they dont sting you or your customer for 10% payroll. It does happen.

If the customer is happy about paying an agency and the contractor prefers to deal with an agency then why on earth not? If the client wants to pay the agency 10% it really isnt any of your business.

[Newby]

I just dont get it?

This might be a bit volatile for a first post, but the only reason why you wouldn't run a limited company in this instance is pure and utter lazyness. You are just throwing money down the drain. If you cannot be bothered then get someone else to do the running for you. There are lots of people that can do that for you! Some of us that are caught by IR35 are so jealous of you having that business situation. You should definitely take advantage while you can. If you do have to go through an agency make sure that they dont sting you or your customer for 10% payroll. It does happen.

[malvolio]

prefer to work direct if I can, but depsite what malvolio implies it is possible to stay outside IR35 even with an agent in the way.

I didn' say that, nor did I mean to imply it. Outside the really bottom layer work where you're basically told what to do, IR35 is for people who either can't be bothered to think or can't be bothered to learn.

Whether there's an agency in the chain is irrelevant - since the OP has effectively a B2B arrangement and the agent is only acting as an invoicng convenience (nd I hope he's on no more than 4% for that), there's no way he will be inside IR35. The rest of us have to be a bit more careful.

[Phoenix]

You can work through my Ltd. for £14.99 per hour (with excellent payment terms on production of a signed timesheet in triplicate)



EternalNomad in "acting like a highly competitive Ltd company" mode

You can have it through me for £14.95 per hour (We accept only duplicate Timesheets) And payment will be received by you, no more than 3 weeks after receipt of your weekly timesheet...


Phoenix in slightly more competitive mode than EternalNomad Ltd

[Paco]

I was in a similar situation once, where I had contacted the client directly and agreed a rate with them. When it came to putting my LTD into their supplier system they decided it was too much hassle and pretty much insisted I used an agency already on their system. I was happy enough as I kept the agreed rate and the agency stuck their (nominal) fee on top, so I got the benefit of the agency's factoring service at no cost to myself. And the agency contract was IR35 friendly.

I prefer to work direct if I can, but depsite what malvolio implies it is possible to stay outside IR35 even with an agent in the way. If you've already agreed the work, rate, etc. with the client you're in a strong position to negotiate any unfriendly clauses out of the agency contract, as they will basically be getting money for nothing.

I agree with everyone else about using an umbrella - why would you ever want to given the situation you are in?

[eternalnomad]

you can work through my company for £15 an hour...

You can work through my Ltd. for £14.99 per hour (with excellent payment terms on production of a signed timesheet in triplicate)



EternalNomad in "acting like a highly competitive Ltd company" mode

[Mordac]

Get a Ltd co for starters. If you're going direct you should be able to agree an outside-IR35 contract (substitution, no MOO etc) so why bother with a brolly? You have to be clinically insane to use a brolly in these circumstances.
Find out who the clients preferred agency is, and if they are any good (the good folk here will be able to advise) then approach them and find out how much they will charge you for factoring your invoices. About 5-7% should cover that and the paperwork. They can also handle the contract for you (to avoid you getting shafted).
Alternatively, if you know a good agency, get them to sort it out. They will handle the HR stuff with your client - as a bonus for them, they get themselves on the PSL, if it's a big client they will probably do you a much better deal. They might (in fact should) offer you a % commission on future business, after all you have provided them with a cast iron sales lead.

Bottom line, start thinking like a business. Get an agent (a good one, they do exist) to act for you when you go direct, it will help you one day. If you can find one who will pay you for the privilege, so much the better.

[malvolio]

Wait a minute....

You have a guaranteed, B2B, non-IR35 opportunity to set up a working business directly with a client and be in control of your life, and you want to put a brolly in the way to tell you how to live? Get real, please.

Set up a Limited or become a Sole Trader. You don't need intermediaries, and 99% of the peope here would kill not to have to use them. And just why do you want to give away somewhere between 5% and 25% of your income to someone who adds no value? Actually, can I have it - you can work through my company for £15 an hour...