Ex company not paying me !!

[ryan7172]

hi guys

Really need advice as partner pregnant not working so money owed to me is priority.

The situation is I was working self employed as a protection advisor , no contract was put in place however an email outlining what happens on exit was sent to say I would be paid on banking and risk and company retains pipeline.

Due to company downsizing I decided to join another company , being self employed I never got paid for the first 2 months as commission from life cover etc takes a while to come through.

Now the owner of business has said he won't be paying me on banked and risk as he expects the claw to be more than the 5% I had already paid into a pot so he is keeping the entire 10k banking 5k were meant to be my wages, Acas have said I am not a employee it's a civil matter, on google it's suggest a mediator, any advice on the best way to pressure to get this money owed to me, I was being paid through my limited company as a payment vehicle , Any advice appreciated ??

 

[Mr D]

Sorry, were you self employed, an employee of your own company, a worker at the new company or what?

 

[Newchodge]

Presumably your limited company had the contract with the client? Your limited comoany should sue the client for breach of contarct.

I haven't the faintest idea what you mean by banking and risk?

You call yourself self employed but then state you were being paid through your limited company. As you don't appear to understand your own situation you really ought to speak to a lawyer.

 

[ryan7172]

No there were no contracts at all in place , for the last 2 years the monies were paid into limited company bank account, I was advised this was the best way to setup as self employed , bankings and risk in life insurance sales mean the insurer pay the business when policies start and then the business pays my business account, online it's says I can use a mediator or issue Small's claims , so confused I know he is pulling a fast one , that's why he lives in a big mansion while I still rent I suppose !!!!

 

[ryan7172]

I was the only person working in the limited company I was setup as the director , it was really just a payment vehicle as running a business paying corporation tax I was advised was better than self assessment

 

[Newchodge]

If you worked and they paid you there was a contract in place. Maybe not in writing, but it was a contract.

Either you are self employed or you work through as limited company. Whoever told you thios convoluted setup was the best should be the one to tell you how to deal with the problem.

You so completely don't understand what is happening that you must talk to a lawyer.

 

[ryan7172]

Lawyers are expensive and seen horror stories when I could run up legal bills to leave me in a worst position, I am the limited company , only person in it , only uses as I said to received payments every month , perhaps I should not refer to myself as self employed but the only earning going into the business are mine so I still consider myself self employed

 

[Mr D]

A self employed person is the business and their income is the profit of the business.
A limited company typically employs the person as a director and they are an employee of the company. The income of the company is NOT the income of the director, the director may well have both a wage from the business (like any other employee) plus dividends paid out.

So are you self employed or an employee of your company?

Ah see you have posted while I was writing mine.

 

[Mr D]

Sounds like you need to talk to a commercial lawyer. Not talking to one may be cheaper or may be more expensive than talking to one.
Your company is owed money? Or not owed money?

 

[ryan7172]

goverment suggest a mediator or do you think it's best to claim money , I can see you can do it yourself online on gov.uk making a court claim for money I think you pay a small fee and they make a decision online ? This is new territory for me !

 

[ethical PR]

I think mediators are for employees and employers who are in dispute, rather than two companies.

If you don't want to use a lawyer (and you can get initial advice for a fixed price, here is what you can do.

You need to write (a letter before action) to the company you were doing business from your company and outline how much they owe you and why. You need to reference any email discussions you had with the company regarding how they would pay you, fee structure and what was owing. Give them 14 days to pay the money owing. If they don't pay take them to court.

Your company needs to take their company to court.

 

[ADW]

So it is confirmed you are the sole Director of a Ltd company.

There is a best way to do this which would offer the safest result which in turn is also the most costly i.e. the correct legal advice from a specialist in company law. The second I guess is small claims court and self filing. Depends on the person you are up against as to how that comes out. Some might just role over if they know they owe but then others will try everything to worm their way out and delay.

I am sure plenty on here know more than me and will be able to give you advice on how to try and process the claim yourself..... as from your previous posts I am guessing that is what you are after. Understand that paying a Lawyer is an extra expense but you need to pick your option with both eyes open.

 

[Big G]

Apologies Ryan but this is so hard to understand.

I think the problem is that you have typed the post as though everyone on here knows exactly what works you carried out for the company that owes you money and exactly how your industry works.

Unfortunately it is apparent that we don't know and don't understand it so no one can really give you the best advice without knowing more about the actual matter.

If you would still like advice on it then I suggest you let us all know the following :

1. When was the contract formed and was this contract formed between you and the company or your company and the company? A contract being formed does not just mean a signed contract but maybe an email between you confirming what it was that you were to do for them and how you would be paid?

2. You have stated that they made payments to your limited company. Was this because you raised actual invoices from your limited company to theirs and they paid them by return? Or was it just the verbal agreement / understanding that they would pay monies owed to you to the limited company?

3. If you did raise invoices what were the payment terms on the invoices and how overdue are they?

4. Have you requested payment in writing and, if so, have you had a reply from them with any dispute or reason why they are not paying you?

Once we have these details we may be able to give you more advice on the best course of action.

 

[tony84]

It is not uncommon in our industry that future income is held to offset the liability you have if you leave the company until that liability subsides.
The reason being is that if a policy comes off the books, it results in a clawback as you presumably had your commission upfront. This is one of the reasons why I try to get my brokers to take the commission on the drip, or at the very least some on the drip and some upfront, just to reduce the clawback liability. In theory, you could go and churn those clients resulting in your ex employer being sat with a massive debt from all the clawbacks.

What your ex employer should be doing is totalling up the liability and then agreeing to make a payment to you every month/quarter/year over the next 2-4 years as the potential liability reduces. However, you could find that if you push it, your employer just churns the business and you lose the bulk of it anyway.

Difficult if there is no contract, but surely that can only go in your favour as you have evidence of receiving x% per sale no doubt.

 

[14Steve14]

You seem to be saying that legal assistance costs money, but you could recover that money plus more if you go the legal route. Most good solicitors will give you a free 30 minutes assessment, so it could be worth just having a chat to one to see what your chances and position are. Did you also have legal expenses insurance cover. That may help. Before taking any action you need to make sure the person or business you are claiming against does actually have the ability to pay should you win. Dont assume that they can pay.

 

[Newchodge]

It is not uncommon in our industry that future income is held to offset the liability you have if you leave the company until that liability subsides.
The reason being is that if a policy comes off the books, it results in a clawback as you presumably had your commission upfront. This is one of the reasons why I try to get my brokers to take the commission on the drip, or at the very least some on the drip and some upfront, just to reduce the clawback liability. In theory, you could go and churn those clients resulting in your ex employer being sat with a massive debt from all the clawbacks.

What your ex employer should be doing is totalling up the liability and then agreeing to make a payment to you every month/quarter/year over the next 2-4 years as the potential liability reduces. However, you could find that if you push it, your employer just churns the business and you lose the bulk of it anyway.

Difficult if there is no contract, but surely that can only go in your favour as you have evidence of receiving x% per sale no doubt.

Some of that makes sense, Tony, although terms like clawback, churn and drip may need explaining.

It is, however, legally impossible for the OP to have a payment system of that kind without having a contract.

 

[MikeJ]

Anyone else think he'll need this money to pay his corporation tax?

 

[Newchodge]

Error

 

[tony84]

clawback - so what happens when you sell a policy you can take all of the commission upfront or get it paid on the drip (ie monthly, every time the customer pays a premium). If you take the commission upfront and policy gets cancelled during the initial 2 or 4 years (depending on your agreement with the insurer) they will "clawback" a percentage of the commission depending on how long the policy has been in force.

churn - some brokers will re-write the policy again after the 2 or 4 year period is up. There is nothing wrong with this in theory as peoples circumstances change and alterations are needed to ensure they are adequately covered, but some brokers just do this as a matter of course and that is their business model even if the current policy is still ideal for the customer.