Contractor - Owed Money :(
Discussion
So in October 2016 I took a position with a start up, based in the UK. The long and short of it is that the project stalled, and the principal who employed me has ceased to respond to calls/emails. Predictably, I haven't been paid - I have 4 invoices outstanding for a mix of personal expense incurred on behalf of the company, and consultancy fees. The individual invoices are all reasonably small, but the total i'm owed is a shade over £10,000. All the invoices are overdue for payment and are from my own limited company (IE i'm not a sole trader). The last communication I had from the principle was at the beginning of December.
At the same time there is at least one other company that hasn't been paid (the recruitment agent that placed me and some other employees), who has a claim higher than me. Exact amount isn't known by me, but has been confirmed to be over the small claims court limit of £10k)
What's the best way to approach this? Submit individual claims for each invoice which are all underneath the SCC threshold, or go for all three as one claim? Also what's the best way of ensuring that I get paid, knowing that someone else is after money as well? Lastly, my contract is with a company which (effectively) doesn't exist, it had been clarified verbally that the company I was contracted to was part of a "doing business as" arrangement. The address provided for my contract is a generic office, though the "other" company does exist (allbeit at a different address but lists the sole director as the principal).
Of course there may not be any assets within the business, or any money to clear the debt...but I guess no way to find that one out!
At the same time there is at least one other company that hasn't been paid (the recruitment agent that placed me and some other employees), who has a claim higher than me. Exact amount isn't known by me, but has been confirmed to be over the small claims court limit of £10k)
What's the best way to approach this? Submit individual claims for each invoice which are all underneath the SCC threshold, or go for all three as one claim? Also what's the best way of ensuring that I get paid, knowing that someone else is after money as well? Lastly, my contract is with a company which (effectively) doesn't exist, it had been clarified verbally that the company I was contracted to was part of a "doing business as" arrangement. The address provided for my contract is a generic office, though the "other" company does exist (allbeit at a different address but lists the sole director as the principal).
Of course there may not be any assets within the business, or any money to clear the debt...but I guess no way to find that one out!
Send an email telling them "Last notification before legal action" then chase them over the phone. I have had to do this and if you are a nasty enough b
d then they will (usually) pay. If they don't, maybe they can't, and you need to get legal.
If you join the Federation of Small Businesses then they will hire debt collectors to do this for 7% of the amount recovered. I suspect that £700 is cheap to get £10k out after someone has said "no, do what you like".
d then they will (usually) pay. If they don't, maybe they can't, and you need to get legal. If you join the Federation of Small Businesses then they will hire debt collectors to do this for 7% of the amount recovered. I suspect that £700 is cheap to get £10k out after someone has said "no, do what you like".
Not been in Contracting for X years, but I never worked for the client, it was the recruitment company and I was a service.
I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
A few years back a consultant I worked with had a similar issue. Invoices were taking longer and longer to be paid and he had a good relationship with the FD. Letter before action was given, advising them of all future costs if not settled within 14 days. First lot of invoices went to action so consultant was adding court fees and a sensible admin fee.
Whole lot of paid within 7 days. Consultant didn't get any more work from him
Whole lot of paid within 7 days. Consultant didn't get any more work from him
Tricky situation OP, I can only offer sympathy I'm afraid, and endorse what the others have said - a firm but friendly threat to go legal, and carrying through on htat if you have to.
'Project stalled' is the bit that jumps out at me. Why? Have they simply run out of cash? If you and the recruiter aren't being paid, one wonders how many other creditors there are. Top of the tree of course will be HMRC. Have they been paying VAT etc?
I've been fortunate as a long-term contractor to always work with blue-chips, so no issues in getting paid. The expression 'start-up' always make me a tad nervous as to where the money is coming from. Hope you get it sorted.
'Project stalled' is the bit that jumps out at me. Why? Have they simply run out of cash? If you and the recruiter aren't being paid, one wonders how many other creditors there are. Top of the tree of course will be HMRC. Have they been paying VAT etc?
I've been fortunate as a long-term contractor to always work with blue-chips, so no issues in getting paid. The expression 'start-up' always make me a tad nervous as to where the money is coming from. Hope you get it sorted.
Du1point8 said:
Not been in Contracting for X years, but I never worked for the client, it was the recruitment company and I was a service.
I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
That's fantastic and all, but how on earth does that help the OP?I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
sixspeed said:
Du1point8 said:
Not been in Contracting for X years, but I never worked for the client, it was the recruitment company and I was a service.
I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
That's fantastic and all, but how on earth does that help the OP?I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
Du1point8 said:
sixspeed said:
Du1point8 said:
Not been in Contracting for X years, but I never worked for the client, it was the recruitment company and I was a service.
I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
That's fantastic and all, but how on earth does that help the OP?I would send my Invoice + VAT to the recruitment company, they would pay me, they would then charge the end client my fee (invoice + VAT) and then their fee on top.
If the client didnt pay, it was the recruiter that had the issue and the had the funds to pay me or had insurance.
Me : £10k + VAT to recruiter
recruiter : (£10k + VAT) + £1k + VAT to client
Recruiter pays me, client pays them.
UpTheIron said:
As above. Exactly who is your contract with and what does it say regarding the situation you are in?
My suspicion is your Ltd will have a contract with the agent, and it will have a clause stating that if they are not paid they have no obligation to pay you.
Employment businessesMy suspicion is your Ltd will have a contract with the agent, and it will have a clause stating that if they are not paid they have no obligation to pay you.
If you run an employment business you’re responsible for paying the temporary work-seekers you supply.
You must pay a temporary work-seeker for all the hours they work, even if you haven’t been paid by the hirer or the work-seeker hasn’t got a timesheet authorised by the hirer.
AND
Limited company contractors and opting out of the rules
Work-seekers registered as limited companies are also covered by the rules unless they say they want to opt out.
In this case, the hirer must be told this and the rules will no longer apply.
Workers who’ve opted out can decide to follow the rules again, but only when they’ve finished working for the hirer they opted out with.
https://www.gov.uk/employment-agencies-and-busines...
See my post above. You can't opt out if you were introduced to the client before opting out.
http://www.brookson.co.uk/knowledge-centre/limited...
If you choose to opt-out of the Regulations, you must agree to opt-out of the Regulations before you are introduced to your client. Both you and your limited company must opt-out of the Regulations together, the opt-out is ineffective if only one of you opts out or if either of you opt-out after you have been introduced to the client.
Neptune188 said:
So in October 2016 I took a position with a start up, based in the UK. The long and short of it is that the project stalled, and the principal who employed me has ceased to respond to calls/emails. Predictably, I haven't been paid - I have 4 invoices outstanding for a mix of personal expense incurred on behalf of the company, and consultancy fees. The individual invoices are all reasonably small, but the total i'm owed is a shade over £10,000. All the invoices are overdue for payment and are from my own limited company (IE i'm not a sole trader). The last communication I had from the principle was at the beginning of December.
At the same time there is at least one other company that hasn't been paid (the recruitment agent that placed me and some other employees), who has a claim higher than me. Exact amount isn't known by me, but has been confirmed to be over the small claims court limit of £10k)
What's the best way to approach this? Submit individual claims for each invoice which are all underneath the SCC threshold, or go for all three as one claim? Also what's the best way of ensuring that I get paid, knowing that someone else is after money as well? Lastly, my contract is with a company which (effectively) doesn't exist, it had been clarified verbally that the company I was contracted to was part of a "doing business as" arrangement. The address provided for my contract is a generic office, though the "other" company does exist (allbeit at a different address but lists the sole director as the principal).
Of course there may not be any assets within the business, or any money to clear the debt...but I guess no way to find that one out!
Afraid I can't really help with the question, but is your username related to a Coventry based airline that flew Electras? At the same time there is at least one other company that hasn't been paid (the recruitment agent that placed me and some other employees), who has a claim higher than me. Exact amount isn't known by me, but has been confirmed to be over the small claims court limit of £10k)
What's the best way to approach this? Submit individual claims for each invoice which are all underneath the SCC threshold, or go for all three as one claim? Also what's the best way of ensuring that I get paid, knowing that someone else is after money as well? Lastly, my contract is with a company which (effectively) doesn't exist, it had been clarified verbally that the company I was contracted to was part of a "doing business as" arrangement. The address provided for my contract is a generic office, though the "other" company does exist (allbeit at a different address but lists the sole director as the principal).
Of course there may not be any assets within the business, or any money to clear the debt...but I guess no way to find that one out!
UpTheIron said:
As above. Exactly who is your contract with and what does it say regarding the situation you are in?
My suspicion is your Ltd will have a contract with the agent, and it will have a clause stating that if they are not paid they have no obligation to pay you.
It's unclear from the OPs post what the setup was. He says in one sentence that the agency "placed" him with the company, which would suggest it was an introductory arrangement where the agency took a fee for doing this, yet in a later sentence he talks about "the company I was contracted to" which suggests it was through the agency rather than direct.My suspicion is your Ltd will have a contract with the agent, and it will have a clause stating that if they are not paid they have no obligation to pay you.
Let's get it clear : were you contracting to the agency or the start-up company? Who were you invoicing for the work? And what signed contract/terms and conditions of your own do you have in place for payment and with whom?
It sounds to me like your contract was with the agency based on the limited information provided so it's them you should be chasing for your money, not the start-up company. The fact that the start-up company has gone pop or hasn't paid the agency is not your problem.
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