Agency not paying the promised rate .

fuzzracket30

unforeseen wrote: »

This is obviously your first contractor type role.

Ouch:eek: Thanks for the help.

As stated earlier, I've not worked through an agency for a number of years. I've worked through many agencies previously. This is the first time I'm seeing deductions made from the advertised pay that aren't umbrella handling fees or similar, something like £15-20/week

Could it be that the law has changed in the past 5 or so years?

Or have the practises of agencies changed in regards to advertising rates inclusive/exclusive of fees?

sangie595

fuzzracket30 wrote: »

Ouch:eek: Thanks for the help.

As stated earlier, I've not worked through an agency for a number of years. I've worked through many agencies previously. This is the first time I'm seeing deductions made from the advertised pay that aren't umbrella handling fees or similar, something like £15-20/week

Could it be that the law has changed in the past 5 or so years?

Or have the practises of agencies changed in regards to advertising rates inclusive/exclusive of fees?

What you are describing is the standard method of operation for many agencies, and nothing had changed except, perhaps, that the use of contractor roles and umbrella agencies has substantially increased due to agency worker regulations. I cannot think of any point in time when the advertised rate was net and not gross. Perhaps the agencies you worked for were unusual in this respect?

unforeseen

Also not forgetting that changes in April with public companies and IR35 add a curveball

fuzzracket30

Yep, I guess I must have managed to just work with abnormal agencies up until now! Have started to have a think about setting up a limited company over the past few days in response to this harsh new world I've discovered.. Need to do some more weighing of pros and cons.

Appreciate the time and advice all. Enjoy your holidays!

robpw2

fuzzracket30 wrote: »

Yep, I guess I must have managed to just work with abnormal agencies up until now! Have started to have a think about setting up a limited company over the past few days in response to this harsh new world I've discovered.. Need to do some more weighing of pros and cons.

Appreciate the time and advice all. Enjoy your holidays!

if you do set up on your own - its fairly easy to do - i suggest getting quickbooks its really easy to use and it can submit your fps reports to hmrc (paye) works out tax and ni owing too


Make sure you open a business account to keep money in

Agree what your going to pay your self .

so for example you pay your self a wage of 15/16 an hour -this will decrease your tax/ni requirements
also should leave you with money to cover sickness days/holidays



then you can pay a dividend to yourself as company director out of the profit

sangie595

Alternatively, do shop around umbrella companies. They do have advantages for some people- although you pay the employers NI, in law you are an employee but with considerably more "power" over your circumstances. Being an employee means that you accrue a range of statutory entitlements like maternity pay, sick pay, unemployment benefits - some even provide tax incentives schemes such as childcare vouchers. They have a bad rep in some quarters. But there are also some very good ones. Some even have a limited guaranteed hours benefit that gives some income between assignments. If you have one set up, you can use it across many contracts. And there are tax benefits to expenses claims etc. I know a few people who do this kind of contacting with umbrella companies because they prefer the lack of hassle and the benefits they get outweigh the advantages of limited company status. It does depend on what you want and why.

motorguy

fuzzracket30 wrote: »

I disagree

You can disagee with me all you like but thats what happens.

fuzzracket30 wrote: »

the client are paying £200 plus the agencies margin, which can be as much as 40% ontop.

Typically they're around 10%, not 40%. My agency takes around £50 a day.

fuzzracket30 wrote: »

I can sort of appreciate the umbrella taking their NI ou
t as they are unaware what has been agreed (or not..) between the agency and myself. But, the agency suddenly only offering £19.56 when their NI could/should be coming out of their own margin - especially as it's never been mentioned before when talking about my pay.

It wont be coming out of their margin. It will be coming out of your day rate.

motorguy

fuzzracket30 wrote: »

In any other job advertisement (non-agency) where they state your salary, you expect to get paid that salary. You don't expect your employer will take 10% from it without telling you and pay their own National Insurance contributions from it, do you?

Surely it's called Employer's NI for a reason.. not "Employee's fee for being employed"

And therein lies YOUR confusion. The £200/day isnt "your salary", its the DAY RATE for your services.

Any TAX due - including Employers NI - comes out of your DAY RATE. If it were a SALARY, then no, it wouldnt.

motorguy

sangie595 wrote: »

Alternatively, do shop around umbrella companies. They do have advantages for some people- although you pay the employers NI, in law you are an employee but with considerably more "power" over your circumstances. Being an employee means that you accrue a range of statutory entitlements like maternity pay, sick pay, unemployment benefits - some even provide tax incentives schemes such as childcare vouchers. They have a bad rep in some quarters. But there are also some very good ones. Some even have a limited guaranteed hours benefit that gives some income between assignments. If you have one set up, you can use it across many contracts. And there are tax benefits to expenses claims etc. I know a few people who do this kind of contacting with umbrella companies because they prefer the lack of hassle and the benefits they get outweigh the advantages of limited company status. It does depend on what you want and why.

Agreed. Although they work best for people at the lower end of the day rate scale or for people who perhaps dont intend to stay in contract / temp work.

With limited you will pay a lot less tax, and you can also offset quite a few expenses against your tax.

However, typically you would want to employ an accountant which is roughly £1500 a year or so.

There is also merit in using the agency's umbrella company (where costs are similar) as ultimately then you have only one "!!! to kick" if there is a payment problem. If you dont get paid for whatever reason you can end up chasing the umbrella company who say its the agency's fault and then the agency say its the umbrella company's fault.

motorguy

The O/P might find this forum useful....

https://forums.contractoruk.com/