Anyone work for a recruitment agency?

ChroniC

ChroniC

ChroniC

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Joined
18 Oct 2002
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I was wondering about a practice in the recruitment sector.
Many self employed people now have to use an umbrella company to be paid if they are not limited when freelancing. This is fine but recruitment agencies are now getting in clients by lowering their cost to the employer by making the employee pay the Employers National Insurance Contributions from their day rate rather than from an uplifted sum of money to cover it.

Is this common practice amongst all recruiters to make themselves competitive or is it a dodgy practice that I should be concerned about, as it has happened to me!
This article explains it well. https://www.theguardian.com/money/2...sts-dodging-ni-cutting-rights-supply-teachers

Infact my situation is much worse than that article. The recruitment agency have given me a day rate and then from that made me pay the ENIC, business costs, and pension costs. This imo is totally wrong and over a week has cost me £70. I am happy to pay the umbrella company charges to use their services but I am sure that this is wrong.
 
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I'm not a contractor but the ContractorUK forum may be able to advise you if you don't get an answer here.

Can't you just setup your own Limited company and avoid these costs instead?
 
Thinking about it, your employer in this case is the umbrella company, they should be paying ENIC - obviously it'll come out of the money their client pays them, but you should then have an agreed rate with the UC? What does your contract state?
 
It comes down to what level of haggling power you have. Can you be replaced easily enough if you decide the contract is not in your financial interest. If not, then you want a be be demanding higher day rate to cover the extra expense.

From the article, I'd be far more concerned at the slow payments. Weeks and even months for it to come through. That would be the real deal breaker for me. Cash flow is king.
 
Jokester said:
Aye, the way I'm looking at it the UC are doing absolutely nothing for their fee, are they even doing PAYE for you?
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Yes the UC do all the PAYE for £24 fee, however they are also doing the Employers part too, which should be covered by employer and given inside the lump sum to the recruiter as a + above the dayrate however to attract business the recruitment agency are taking that sum out of my day rate and claiming it's standard issue thus lowering their total costs to the employer. I'm interested to see if that's the case across all recruiters or whether it's a scam.

With regards to contracts, I don't think I've ever signed anything with the recruitment agency. It's all online. I am searching emails now to see if I did it online. (worked with them years ago for a day and didn't notice these costs as much)

Jokester said:
If you're paying all your costs, you may as well just go limited company surely?
Click to expand...

Yes, I am looking into this now after this fiasco.
 
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eh? If you're 'self employed' then surely you are responsible for employers NI. I mean if you had a limited company then you'd be paying it via that and in the case of the umbrella company then surely it comes out of your day rate too and ditto to all the other contractors going via that umbrella company?It isn't like there is some, for want of a better phrase, 'magic money tree' to cover it for you - I mean who else should be responsible for it if not you?

Also why not just set up a ltd company? I really don't see any benefit in going via an umbrella especially if you're not happy with how they arrange things.
 
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