Go Direct | Can you dump your agency and go direct?

Go Direct Contracting

With the Agency Regulations in effect for limited company contractors, we asked an expert whether IT contractors could then simply dump their agency and go direct. Here are their answers.

Go Direct Questions

1) As regards contractors who have current IT contracts, when it comes to their renewal time, are they free to talk to their clients about going direct and cutting out the agency?

2) It has been suggested that IT contractors can opt out, take a contract through the agency, and then opt out after they have started work. Is this correct? If so, it would mean that they could go direct at the end of their contracts.

Go Direct Answer

Both of the questions are resolved by the client – agency contract.

If the Agency has terms with the client to say that the taking on of any contractor is subject to a fee or alternatively a new contract under the current terms, then this is allowable.

It does not matter what contract the supplier has as there cannot be any restrictions in the agency/supplier contract, but they will not be offered a place by the client without the client being charged.

Can Go Direct

If the agency has only got a restrictive clause in their agreement with their client and not a continued supply clause (due to apathy), then if the contractor has not signed an opt out, it does appear that they could go direct!

Again if someone opts out, then back in whilst in the contract as long as the agency – client contract has a continued supply and a placement fee alternative, they will be restricted in going direct by an allowed fee to the agency by the client.

Note

ITContractor is not responsible for these opinions and you should take legal advice before taking any action.

Can I book travel expenses after 2 years at same location

Travel Expenses

This question was sent to us and was answered by one of our Accountancy readers. Add to the advice, if you like, in the comments section after the article.

Harvey Asks a Question on Travel Expenses

Hi

Can anyone give advice. I am currently a IT contractor and have been contracting in the same location just under 2 years.

The concern I have is that I have been told by a colleague of mine that I will be unable to book travel expenses against Tax after 2 years working in the same location. Is this correct?

Also can anyone tell me if I can do a short contract at another location i.e. 2 weeks will that reset the 2 year rule. That may be a way round it if I can do that.

It would be much appreciated if anyone has any experience they can pass on or a contact who I can discuss this with further. All help will be appreciated.

Thanks in advance for that,

Harvey

Top Accountant’s advice to Harvey

Hi Harvey,

This is quite correct, you cannot claim travel expenses after 2 years as it will be deemed that you are a permie employee because have been there for so long. You might also have problems with IR35 after a couple of years in the same place.

By doing a short contract you could reset it but it all depends on the length of the short contract. If it is anything less than 9 months and you could be on shaky ground there.

Travel Expenses are for someone who is working in a temporary location. You can hardly claim it is temporary if you have been working there, with the same, client, doing the same ob, for more than two years.

Good luck, anyway – and let us know how you got on.

Can anyone help me asks IT Contractor

Help Me

This was posted to our General Forum by an IT contractor asking for advice. I’ve replied there, but as he needs the advice at short notice, I though I would post it to the articles page as well, to see if anyone else has any advice.

Help Me – Call for Advice

Hi.

This is a warning, and a call for advice, and a chance to rant all rolled into one convenient post.

I’ve been working directly with clients for about 2 years now. My invoices are rarely paid on time. I understand that this is common practice in the business world, but this time around one client is being really, really arsey.

I agreed to work on a weekly rate building them a web app. I told them it would take about 6 months.

When I met them, they showed me their currently live product, which was utter ****e.

I told them it wasn’t worth doing any fixing on, but agreed that I would fix it so that it worked at a reasonable speed, but nothing else.

I worked and worked, and during my time working, I was asked to carry out fixes to the old site. I said that this would push back the launch of the new site, but I was told that there would be budget by the project manager (a friend of mine, who got me the job).

Budget Gone – Help Me

Then one day I’m suddenly told that there’s no budget left (this was 6 months after I started), and that I’d have to have it live by the next week (!). We hadn’t even begun testing, but because he was a mate, and because I take pride in my work, I said I’d put it live for them at no charge.

The PM was in the total **** from the people he was working with, who are very awkward, totally clueless about building software, and hate techies because they’re been burnt by cowboys in the past.

Because the PM was a mate I agreed to do a few bug fixes, on the condition I was paid on time (15k left to pay, owed April 1st). As part of this I have a letter signed by the directors of the company saying that they owe me this money. I thought this would help me.

Promises

After constantly being promised that I was going to be paid on certain dates, I’m still owed 5.5k. Last week I found out the project manager has had a nervous breakdown. That doesn’t help me at all.

Now I’ve been called by the commercial director of the company to say that he wants me to come in for a meeting this week to finish up and sign some bits. Thing is, I got this through my PM friend, and even offered them a reduced rate.

Also, when I work with this mate of mine, we have an agreement that if any code I write doesn’t work properly, I’ll fix it after the end of the project for free, because I take pride in my work.

Now I’m pretty sure the directors of this company are going to ask me to sign something to put this in writing and say I’ll fix anything within 3 months.

I’m confident there’s no/few bugs in it, but I’m pretty sure I’m going to refuse. These people are so difficult, and I really don’t trust them.

I owe them nothing.

I’ve done what we agreed, and they haven’t paid me. This doesn’t help me at all.

Need the Product

They NEED this product live because their old version is utter ****e and is embarrassing them every day.

I have all the source code, and am not letting them have it until I’m paid.

Really, I don’t think they have a leg to stand on because I have this signed letter, and because I have their source.

The reason they’re being so arsey is because they’ve been ripped off by developers in the past.

I guess I’m asking for advice, but also providing a warning to others.

No Formal Agreement

Because the PM was a friend of mine, there was hardly any formal documentation about what we’d agreed. This seems so insane now, but in a comfort zone with a friend I’ve worked with many times, it didn’t cross my mind that it would be necessary at the time.

That’s why I’m glad I have the letter.

A warning to all others – things are done formally at organised places FOR A GOOD REASON!

Anyway.

I want more work out of these people because it’s something I’ve built and can add to quite comfortably, and they hate working with techies because they’re so clueless, and I want the product live because I don’t want my mate to be in the doodah. So I think I’m going to tell them that I’m doing nothing more until I see the figures on my bank account.

Any Advice?

Any other advice from anyone?

This has been such a nightmare. Help me if you can.

I feel like my hands are so tied because I have to look out for the interests of my friend too, although I deeply suspect he’s wooling things over for both me and the client.

I’m thinking this is the last time I work with friends.

They love the product I’ve built too!

You’d really think they’d want to keep me happy after all the cr*p they’ve had in the past?

MD Calling

MD’s ringing me this afternoon apparently.

I feel so helpless as a one man band versus a company.

Does anyone have any advice on either how I can ensure this doesn’t happen in the future?

A friend has advised me that it’s best to have a date each month when all clients pay currently outstanding balances for what’s been done.

All of a sudden I’m missing working for an agency!

Help me with some advice.

KR.

Can agencies get away with mistreating IT contractors forever

Mistreating IT Contractors

IT Contractors have always complained about some agency tactics and their treatment by them. Will this come back to haunt agencies? Can they get away with mistreating IT Contractors forever?

Many agencies say that they have no time to contact contractors to tell them that clients do not want to see them for interview.

When a contractor goes for an interview, the agencies say that they have no time to contact contractors and tell them that they have not got the job.

They say that there time is better spent trying to find out which clients have got work and in trying to place contractors.

Commodity Brokers

Some agents have also said that contractors are not their customers and that it is the clients who are their customers – and that contractors are just commodities. This is their excuse for mistreating IT Contractors.

They also do things like calling up out-of-work contractors telling them that they may have a job for them and asking them for the names of people who they have worked for, companies where their CVs have been sent, and companies where they have had interviews.

Wiser and more experienced contractors will know that these agencies are only looking to generate leads for themselves. They will be in touch with those companies looking to place other contractors.

However, all contractors, before they become wiser, will have been caught out by these tricks at some point in their careers. Mistreating IT Contractors by agencies is endemic.

Self Justification for Mistreating IT Contractors

Our article “Top Ten Tricks used by Recruitment Agencies – Beware” was picked up by another website.

There one agent justified mistreating IT Contractors by the following:-

“Finding out where jobs are, what managers recruit contractors and the like are what keeps the market moving AND what keeps YOU contractors in jobs.

“This is the way IT recruitment has always worked. If you don’t like it find a different career.

“EVERY CONTRACTOR has been put forward for contracts AND secured contracts which were picked up in this way. That’s the way it works”.

More Care Needed?

However, with recent information showing that fewer and fewer contractors are now using agencies to look work for them, do agencies need to drop the idea that contractors are just commodities rather than customers?

Do they need to take far more care in how they interact with contractors?

Should they stop mistreating IT Contractors?

Does it really not matter how agencies treat contractors?

Does it really not matter whether agencies give contractors the common courtesy of telling them that they have not been accepted for interview or have failed to get a job at interview?

Danger Signals

Those agents who say that contractors just don’t matter may be right.

However, they face the danger that, if their image with contractors remains as low as it is, that more and more contractors will simply bypass them and go direct to the client.

They have always had the desire to do so and it was only clients being fearful of legislation that has prevented it.

However, with the last downturn having forced a lot of clients to look at removing costs, including the middle-men agents, and with legislation like the Employment Agencies Act which appears to show the Government and EU coming down on the side of contractors, the worm may be turning.

Rogue Agents

It could be that some agents’ previous disdain for, and mistreatment of, contractors may come back to haunt them.

They, and especially the rogue ones, will have only themselves to blame for that.

They have to stop mistreating IT Contractors.

If agencies are to prosper in the future they may have to take the radical step of considering contractors as valued clients.

Now that would be something!

Are IT agencies making up the jobs on IT Job Boards

This was sent to us by a reader.

Making up the Jobs

Are IT Agencies just making up the jobs on IT Job Boards?

I applied for a job on one of the job boards that was just up my street. I sent my CV off within minutes of the job being posted. I called up the agency within 15 minutes of it being posted.

The agency said that the job was gone.

How can it have gone so quickly?

How quickly do jobs go nowadays?

Are they just making up the jobs?

I must say I was a bit disappointed. Imagine my surprise when the same agency posted what looked like exactly the same job the next day.

I must say that I was more than a little annoyed, so I called up the agency asking what it was all about. They said it was a different job. I asked if I could be put forward for that one. They said it was already gone.

Same Job Ad

I did some investigation and saw that they had been putting on pretty much the same job spec for the past couple of months.

I called them up again and asked what was going on. Did those jobs really exist or were they just trawling for CVs. Were they making up the jobs?

They said that the jobs did exist and the reason that they put in many similar job specs over that period of time was because they specialised in that particular area.

I said to them “Well if you specialise in jobs for that particular area and you have jobs for that combination of skills almost every day, could I have one of them, or at least be put forward for some of them”.

Bad Reference

The guy hummed and haa’ed for a few seconds before he said that the reason that they hadn’t, and couldn’t, put me forward was because they had had a bad reference for me.

“But you only received my CV yesterday and you haven’t put me through for any roles, yet” I replied.

“Who did you contact” I asked?

“We’re not allowed to reveal that”, he replied.

Needless to say I didn’t believe this so I phoned up my bosses at the only three companies where I had worked and asked if anyone had called asking for references for me. Each of them said a quite definite “No”, and told me that if anyone did that they would give me a good reference.

Getting Angry

By this time I was getting very angry.

I phoned up the agency again and told them that none of my three firms had had any requests for references.

I must give this guy credit and say that he is very quick on his feet. He is never short of an answer.

He said, “It was an ex-colleague of yours – someone you used to work with that we have on our books”.

Of course he wasn’t allowed to say who it was or where I worked with him.

Telling Lies

It seems pretty obvious to me that this guy had been lying through his teeth the whole time. There was never any job. They were making up the jobs.

If he had just been honest and said to me in the beginning “This is a standard ad of ours and there was no particular job. However, we specialise in this area and get a lot of requirements in this area” then that would have been fine. If he told me they were making up the jobs I would have accepted that.

I would have been happy with that and happy that I had my CV with an agency who have regular requirements in an area where I specialise.

It’s the lying and deceit that gets me when there is no need for it.

Overtime | Are you working too much overtime?

Higher Risk from Overtime

The European Heart Journal has just published some research from a study of 6,000 British Civil Servants.

It found that those who worked three to four hours a day of overtime have a 60% higher risk of catching heart disease.

It seems that the amount of overtime you put in is directly related to the incidence of heart disease and angina. It stands to reason that it would. Stress is the great killer. Working copious amounts of overtime adds to stress and gives you less time to become unstressed.

Bit of a Downer

That would be a bit of a downer – working all the hours under the sun and then having no retirement time to enjoy the fruits of your labour. Not only is your boss taking some time out of your free time, he, or she, maybe taking time off the end of your life.

The study only looked at overtime.

However, what about those that worked 5 hours a day on average compared to those who worked 7 or 7.5 hours a day?

Is there a perfect number of hours to work in the day which is healthy for you?

Or is work, in itself, bad for your health and no hours a day are the healthiest?

Unhealthy Poor

However, those that don’t work may not be too healthy as they can’t afford it.

Are the lifetime unemployed more healthy and do they live longer than the rest of us?

Other surveys have shown that poverty is a major factor in longevity of life and people from middle class areas live longer than those from working class areas.

Perhaps there is a perfect number of hours in the day to work but it would depend on what you got paid for that number of hours.

Maybe sometime in the future they will have worked out how many hours in a day is best for us and change the laws so that it is illegal to work after that.

Next time your boss or client wants you to work overtime remind him that he may be asking to take time off the number of years you are likely to live.

General Election | LibDems Won IT Contractor Vote

General Election

According to a survey of 1,300 job seekers just before the last general election by Totaljobs.com 38% of all IT workers intended to vote for the Liberal Democrats in the General Election.

That’s 15% above the national average.

Around 28% intended to vote Tory – 8% less than the national average.

Only 15% said that they intended voting Labour – 14% below the national average.

18% said they would vote for Other Parties – 7% more than the national average.

5% at the time were undecided.

Interesting General Election Figures

Those figures are very interesting.

With all the efforts of the PCG (now IPSE)  last time to sell the Tories as the part of the contractor, I’m surprised the Tory votes is below the LibDem vote.

I would say that many of those LibDem votes are up for play this time.

It seems that IT Contractors are more swing voters than the electorate as a whole.

Perhaps the parties should take more interest in IT Contractors if that is the case.

Labour and IR35

Labour were unpopular last time round because they introduced IR35 and allowed lots of IT workers to be imported from overseas.

At the last election the Tories cynically conned the PCG into thinking that they were going to abolish IR35 when all they said was that they would ‘take a look at it”.

They did take a look at it and decided to Strengthen it hiring 36 extra Compliance Officers based at Edinburgh, Salford and Croydon to hunt IT Contractors down over IR35.

It must have been like taking candy off of kids as regards getting the PCG to send out a Press Release just before the last election hailing their ‘triumph’ and influence over the Tories.

One wonders if ethe Tories vote of 28% will stand up this time.

One wouldn’t expect the LibDems’ vote to stand up either.

But will it go to Labour?

IT Contractors Confused

IT Contractors must be genuinely confused.

What promises have the parties made to IT Contractors for the General Election?

Both the Tories and Labour have promised to bash Umbrella Company travel and subsistence expenses.

Swing Voters

There are several hundred thousand IT Contractors dotted throughout the land. They are genuine swing voters. The parties say that the election is down to just a few hundred voters in swing constituencies.

If they stopped bashing IT Contractors and stopped seeing them as tax avoiders and offered them something it could make all the difference to their general election chances.

IPSE (ex-PCG) should be taking this opportunity to bargain with the parties.

They made a fool of themselves last time. Now is their chance to redeem themselves.

Talk To The Parties

They should talk to the parties and then lay out what the parties are offering contractors (and how they are going to bash them).

They should not be seen as giving nods and winks to the Tories again – especially on such flimsy, easy-to-see-through, ‘promises’.

There’s always been seen as a Tory bias in the higher echelons of IPSE. According to the totaljobs poll that makes them unrepresentative of their audience.

It would be good if totaljobs did another poll this time around and the results presented to the parties. They might start to take notice of us then.

10 tips for Out of Work IT Contractors

Out of Work

When IT Contractors have been out of work for a while it is difficult to back into IT Contracting again. Here is some advice for those in that situation.

It must be very depressing when you have tried your hardest but you just cannot get an IT Contract. The months must seem interminable – but you shouldn’t give up.

Here is some advice for IT Contractors out of work.

Take Some Training

Learn new skills. Take a course. A training course is unlikely to get you a job by itself but you never know – especially if you take a course in a skill that was in short supply and the IT Contracting market was booming. This combined with some of the others below could land you a contract.

Help Locally

Help someone locally who can use your skills. Offer your skills to a local charity. That way you don’t have a huge recent gap on your CV – and I’m sure you’ll get a good reference from them.

Build a Website

Build a website using some of the skills that you have when you are out of work. You can show it to any potential employers to show that you’ve kept your hand in.

Learn a Tool

Take a training course in some new tool that is related to your area of expertise. Ask the tool vendor to place you at one of their clients. Tool vendors usually like to sell in ‘consultants’ at premium rates or even just ‘bodies’.

If you’re short of money to pay for the course ask the vendor if you can pay for it out of future fees they get you.

Help a Mate

Do some work for a mate of yours who is using your skillset at his client’s. He will be able to furnish you with a reference from his limited company.

Good Excuses

Make sure you have a good story for the missing months or years when you are out of work. Agencies and clients hate IT Contractors who have huge gaps in their CVs. It’s a phobia of theirs. Don’t just leave a space. Say what you were doing during that time – or they’ll think you were in jail or something.

Take a Rate Cut

Be prepared to cut your rate. Even if the agency doesn’t cut theirs to the client they will be much more willing to get you an IT Contract than someone else that they can make money from.

CV Assessment

Let other IT Contractors and Recruiters see your CV and ask them what they think of it. It may be your CV that is costing you.

Change Your Attitude

Change your attitude to agencies. Think of them as the guys that are going to put money in your pocket. Be friendly to them. Try to sound cheerful as well rather than down in the mouth. Be confident in your skills and ability when you talk to them.

Don’t give up

It’s too easy just to sink into a morasse of self-pity and stop searching for work. If you’re not looking for work you won’t get it. Set aside a time of the day, even if it is just an hour, for job hunting. Do it every day when you are out of work.

IT Agent lied through his teeth to me

Agent Lied

IT Agent Lied Through His Teeth To Me was sent to us by Daisie.

Fixed Margin

I agreed to do an IT contract with a local authority at a low rate because the agent said they had an agreement with the client for a fixed margin.

Yes I’ve heard this before and should know better but this a big, well established agency with (apparently) a good reputation.

Upon renewal, I asked for an increase and had several phone calls with the agent where he said the client was unwilling to up the rate and since they were on a fixed margin which was very low they wouldn’t alter that.

Eventually the agent said they had persuaded the client to pay a bit more and the rate was upped slightly.

Added Sentence

I signed the new IT contract and added my own sentence about the fixed margin which I sent back to the agent, he eventually countersigned and returned it.

At the next renewal this agent was on holiday and the contract (on the same terms) was signed and the margin countersigned by a colleague of his.

Just before the IT contract ended I discovered that the client had been paying considerably more than the agent had told me, and that there had been no renegotiation with the client at renewal they had just chopped the considerable margin a bit. The agent lied to me.

Too Much

I told the agent I knew they were charging too much and he said that his colleague had made a mistake in the client rate on the last renewal and they had sorted this out with the client and repaid them the money (untrue), so I was not owed anything.

I have now sent an invoice for the difference of the money I was paid and the fixed rate they should have charged.

The agent says he will pay only money due for the IT contract he himself countersigned, and is now protesting that there was never any talk of fixed or preferred rates, but he does now admit that I am owed money and that he knowingly countersigned a false agreement. The agent lied to me.

How long should I give them to pay up?

Paying Invoices – IT Agency won’t pay me. What shall I do

IT Contractor Question on Paying Invoices

I work for more than one client.

I do a certain number of days in a week, and then I get the client to sign for them and send it off to the agency.

I have accumulated about 23 days for a particular client, and he has signed off all the timesheets for them.

However, I haven’t said what days I have worked when I have invoiced the agency. I haven’t kept a record. It’s just 2 days in one week and three in another.

Now the IT agency say that they can’t pay me as I haven’t given them a record of the days worked. I was hoping that Paying Invoices would be automatic.

IT Contractor Answer on Paying Invoices

If the client has signed for the days, that means that he is willing to pay for them. This also means that the agency are able to bill for them.

It might be worth asking the agency if they have billed for them.

It might be worth asking the client if you can bill them directly if the agency won’t pay.

I would also worry a little that this might just be a ruse to delay paying you. They might be in some kind of financial trouble. Sometimes that is the real reason they are not paying invoices.

IT Contract Terms

I suppose that it is all down to what your IT contract says. If it says that you have to state the days, then you have to state the days.

If it doesn’t then the IT agency are breaking their contract by not paying you and then you can go direct.

I think that they should be paying invoices within a certain number of days of receiving your invoice or they are breaking the contract.

There’s also the possibility that the client is happy, but that the client is not invoicing the client directly but some other department like Purchasing or HR – and it is these departments who are kicking up a stink.

Have to Pay

They should get their own house in order. Also, the fact that the client has signed might mean that they legally have to pay, as he has signed on behalf of the company – despite not following their procedures.

As you know in your heart, the simplest thing in the future is just to jot down the days and do it how they want.

I would find out which of the scenarios highlighted above has kicked in and take the appropriate action.

If it is purely the agency being ‘bolshie’ than you have the opportunity to dump them – if they have broken their contract with you if they have not been paying invoices.