Split Payments
If you are a Tutor Agency operating as an Employment Agency then you will be aware that each Tutor must be in control of the payments due to them from clients. This is a major change to the way in which many Tutors and Agencies operated prior to the recent case law.
In response, many Tutor Agencies and their Tutors have opted to look at using split payments. Effectively, split payments mean that
- you, as a Tutor Agency, provide the client with one payment request which clearly shows the split of fees (i.e. your charges and the Tutor charges are clearly shown separately ) and so
- when the client pays, their payment will be automatically split between you and the Tutor by the payment provider.
Additional Criteria
Split payments are on the boundary of what is acceptable when you are a Tutor Agency operating as an Employment Agency. That means that there are additional criteria which you must also meet:
(1) Make sure that the Tutor agrees that you can send out each individual payment request.
This will involve you putting a system in place to enable the Tutor to do this. One way of doing this is issuing a payment request.
(2) Do not include any logos on the payment request invoice so that the client/payee is not confused about whom they are paying.
(3) If a client/payee does not pay, you can NOT send a reminder/chase up the Tutor’s portion of the invoice for them.
If you are a Tutor Agency operating as an Employment Agency, then you must now check your split payment system. Some software systems which Tutor Agencies use, like TutorCruncher have been able to adapt their systems to accommodate these criteria.
Not sure which business model you need to use for your Tutor Agency?
Tutor Agencies must now operate as either an Employment Business or an Employment Agency. You can read more about these changes here.
Do you need support?
If you are a Tutor Agency operating as an Employment Agency, look at our Template documents pack. Practical, affordable, easy to use and written by lawyers especially for a businses like yours.
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