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Agents who take huge cuts , renewal time strategy.

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    Agents who take huge cuts , renewal time strategy.

    I've just discovered , on an INSIDE IR35 contract, that my client is paying substantially more per day than the agent is letting on.

    A fellow contractor showed me his rate , and he's clearing 12.5% more per day than I am.

    The client has told me, up front that I am costing them considerably more than him.

    End Client wants me to stay on for 6 months for another large project - I took the gig on to "help" , but can easily go back to market for double the rate for a waiting client.

    Problem that I have is , I like the client and get a buzz out of the work I'm doing. But, it's hard enough being voluntarily on 50% less per day than I would be OUTSIDE IR35 and have the micky took out of me.

    How have others dealt with this?

    I'm tempted to either
    1. Tell the agent I'll drop them unless they give me transparency on their cut and stick to 10% max.
    2. Tell the client to not panic, and push back on any requests to increase my daily rate - and also go to the agent and demand an increase.

    This isn't general, so to help you all, I've already told myself to grow a pair, grow up, and make my own decisions

    Seriously thou, advice is welcome from anyone with experience of this.

    #2
    Did you ask your accountant?


    I can't see how you can tell the agent to FRO if there's any hint of a handcluff cause in the contract or the agent is the only one on the client's PSL. So, you need to check that before you do #1.

    I would consider mentioning to the client the level of mark up on your rate, assuming the disparity between your rate and that of your colleague is due to mark up and not something else. Tell the client - I get paid x, what are you paying for me, is that in your contract with them?

    I can't see how #2 would work. You want the agent to cut their mark up, and I presume increase your rate accordingly, but that means the client still pays the same and they have already implied it's a bit much.

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      #3
      Thanks ladymuck - I've done the conversation with the client and they were VERY honest - They are paying a huge markup.

      The client is happy with the rate they are paying me, so I must have been a bit confusing in the post - I think I may well end up doing 1, then playing hardball and doing 2 if not - if the agent doesnt capitulate , I know the other contractors are using a variety of other agents, so I can go elsewhere.

      Thanks again!

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        #4
        Originally posted by Scoobos View Post
        Thanks ladymuck - I've done the conversation with the client and they were VERY honest - They are paying a huge markup.

        The client is happy with the rate they are paying me, so I must have been a bit confusing in the post - I think I may well end up doing 1, then playing hardball and doing 2 if not - if the agent doesnt capitulate , I know the other contractors are using a variety of other agents, so I can go elsewhere.

        Thanks again!
        Go elsewhere if you can. You'll get a better rate.

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          #5
          At renewal, tell the agency you want, e.g. a 25% rate increase, or you walk. And mean it.
          Down with racism. Long live miscegenation!

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            #6
            Thanks all, appreciate it.

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              #7
              Go to the agent and ask for a bigger cut. The market for agents is horrendous and they won't want to lose out on income at the moment however definitely make sure you have an offer as a back up in case they call your bluff.

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                #8
                BTW, if Hays are on the PSL and you are bringing them the contract, then they will almost certainly accept the lowest margin - typically 4.762% (5% markup). When I worked via them in similar circumstances, they calculated it down to the penny on the day rate AND rounded up.

                And they paid 7 days after a weekly invoice.

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                  #9
                  Are you actually inside IR35 i.e. being paid through your limited? Is it possible that the difference is actually a stat cost being covered somewhere in the chain? If not and the agent has misled you they shoulkd absolutely accept they've been rumbled and change your rate.

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                    #10
                    Don't get into the trap of saying "but you're paying X more than me" - don't bring other people into it. This is between you and the agency.
                    ⭐️ Gold Star Contractor

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