How do I get paid? Strange situation involve contract work

[HenryCW]

I'm a freelancer/sole trader having real trouble getting paid by a client.


I recently worked 3 small contracts for my client, a marketing agency (3 days/3 days/1 day). I'm not set up as a LTD company, so I had to register with an umbrella company in order to get paid.

The first contract has been processed. I submitted my timesheet and I was supposed to be paid on the 17t of April, but I have received no payment yet.

The second two contracts haven't been put on the umbrella company's system yet. That means I can't even submit timesheets, so the umbrella company can't invoice the client.

I've since been in touch with the umbrella company, and they told me that they can't pay me because they haven't been paid by the client. Apparently the client isn't even communicating with the umbrella company. The umbrella company also told me that they can't put any new contracts on the system until the client pays the money it owes them.

This leaves me in a difficult position:
* I can't get paid by the umbrella company until the client pays them.
* I can't get the umbrella agency to send off invoices for the second two contracts
* I can't invoice the client, because they're unable to pay me directly anyway as I'm not LTD company.
* Because I can't invoice the client, I also can't take them to small claims court (I think).



What are my options here? It seems the agency can just delay payment indefinitely and there is nothing I can do.

Any advice appreciated.

[ostell]

Re: How do I get paid? Strange situation involve contract work

In my opinion that is a stupid rule of the umbrella company in not submitting further invoices until a previous invoice has been paid. With many companies working a 30 day or more turnaround on invoices then it is truly ridiculous.

I can understand the agency not paying until the client pays.

Ever thought of going limited company? Here's the link. You could be up and running tomorrow.

[HenryCW]

Re: How do I get paid? Strange situation involve contract work

Hi Ostell, thanks for your reply.

Spoke to the umbrella company today. They said that actually they haven't received any communication with the client about further contracts. So I'm just kinda 'in limbo' with the last two contracts.

I will go limited at some point this year. It would make no difference me doing it now, because evidently I can't invoice a company for a contract that was carried out before the LTD company existed.

The end client never sent me any official contract or agreement. All I have is an email chain where I was asked to work on a certain day for a certain price. So I basically have an informal agreement via email. I am wondering whether this could work to my advantage. Perhaps I could take the individuals who asked me to work, rather than the company, to small claims court. These same individuals have not really responded to my requests to help, so they haven't tried to help me resolve the matter. I believe this would work to my advantage in small claims court.

[ostell]

Re: How do I get paid? Strange situation involve contract work

Your limited company could always buy the debt off you and then the company claims it off the client, perhaps?

If the individuals were acting on behalf of the company then it is not informal. They requested your services for a price, you agreed, your contract is with the company. I had this sort of delayed payment problem a couple of times when I was working but it's amazing the effect of a MCOL form arriving will do. But then you wouldn't have them as a client again.

This thing about only contracting with a limited company is a silly thought up by the bean counters. I suspect that they are fearful in that by employing your services they may be liable for tax and NI. Not true if you can show that you are truly self employed, ie you choose the times and dates you work and work for other people and issue invoices to get paid.

[HenryCW]

Re: How do I get paid? Strange situation involve contract work

Your limited company could always buy the debt off you and then the company claims it off the client, perhaps?

You mean the umbrella company? They're not a debt collection agency. And I don't have a clear contract I can enforce, sadly.

If the individuals were acting on behalf of the company then it is not informal. They requested your services for a price, you agreed, your contract is with the company. I had this sort of delayed payment problem a couple of times when I was working but it's amazing the effect of a MCOL form arriving will do. But then you wouldn't have them as a client again.

So does that mean I can book someone to come and renovate my house using my work email address, and my work has to pay for it? Of course not. There has to be something that defines who is responsible for payment, surely.

I had this sort of delayed payment problem a couple of times when I was working but it's amazing the effect of a MCOL form arriving will do. But then you wouldn't have them as a client again.

At this point I would not work for them again anyway. How does the MCOL thing work?

This thing about only contracting with a limited company is a silly thought up by the bean counters. I suspect that they are fearful in that by employing your services they may be liable for tax and NI. Not true if you can show that you are truly self employed, ie you choose the times and dates you work and work for other people and issue invoices to get paid.

So theoretically, could I just send them a normal invoice that states that I'm responsible for NI and Tax?

Thanks for your help.