Cut The Agency Out
A contractor contacted us saying his wants to cut the agency out after getting a contract and asking for advice
Ronnie – IT Contractor
I went for an interview and got the job. Now I intend to call up my new boss and try to cut the agency out.
He is a contractor himself and I think he may be up for it. We discussed agencies at the interview and I don’t think he is over keen on them.
It seems to me to be a no-lose situation. Even if he says no, he is hardly going to grass me off to the agency is he?
Cut Out the Agency
If I do cut the agency out I should be able to increase my earnings by quite a bit – so it is worth a shot.
It means that I would then have my own client and it wouldn’t prevent me from talking to him about future work.
I’ve got another couple of interviews to go to if this one goes badly.
What would you do, Dr. McLaughlin?
Dr. McLaughlin’s Contractor Surgery
Well, strictly on moral grounds you don’t have a leg to stand on. The agency did the work of finding you a client, and therefore deserve the commission for doing so.
There’s also the possibility that the client might shop you to the agency, and even if they didn’t, would they want to take someone on who was prepared to double cross his agency?
You would always have the worry that, all the time that you are on the contract, the agency might find out that you are there and kick up a stink, demanding their commission from the client.
You would also have some other disadvantages too. Many clients are notoriously late payers and you might wait weeks or months for payment.
Some people would say, also, that it might make you more liable to IR35, although with recent IR35 cases that argument has been weakened.
Going Direct
There are better ways to cut the agency out. Under the new agency regulation, the agency can’t stop you going direct now at the end of your contract (for a fee) and this may be a better bet for you – unless, of course, you have taken the opt out, which would prevent you from doing so.
Agencies can no longer prevent you from talking to the client about future work, even during the contract.
My advice would be to sit tight for the contract duration, and then talk to the client about new work as you get near the end of your current contract. That’s the time to cut the agency out.
