(29th June 2022) Emma Douds our Contracting Manager gives us her expert opinion one year on from the IR35 reform.
IR35 reform
It has been one year since the reform of IR35 within the private sector. This last year has been a rocky one for contracting, affecting clients and the contract community. It brought changes, uncertainty and new risks to contracting.
But we want to tell you there is hope and it is possible for hiring companies to engage self-employed contractors without the risk. The IR35 reform can present a real opportunity for companies to gain a competitive advantage through their ability to adapt.
Inside and Outside IR35
Let’s talk about Inside IR35 and the challenges it can bring. One of the biggest hurdles can be engaging contractors Inside IR35, why? Because it is estimated to cost hiring companies 25% more than they were previously paying. These costs are a combination of day rate inflation, employers’ taxes, and workplace pensions. In addition, contractors who historically worked on assignments outside IR35 are also reluctant to take roles inside IR35 – furthering difficulty to attract talent.
Many companies are also paralysed by the perceived risks of engaging contractors Outside IR35, primarily due to a misunderstanding of IR35 legalisation.
Solution to IR35
So, what is the solution? We have found that if businesses expand their knowledge and adapt to working with self-employed contractors Outside IR35 compliantly, there can be significant benefits to be enjoyed.
Any risks of IR35 can also be decreased by ensuring IR35 is managed correctly. For example, our IR35 Assured software solution can implement expert-led assessments, produce robust contracts, and include a change control monitoring process. Therefore, reducing any barriers or confusion. Recruitment agencies, like Realtime, will play an active role in ensuring companies are IR35 compliant when hiring contractors!
In my opinion, the future looks bright! Companies are becoming educated when it comes to the new Off Payroll Regulations, meaning they are becoming more flexible with the working practices of contractors. This will increase the number of roles that are Outside IR35 and companies will reap the benefits and attract top contractors in the market!
Partner with Realtime Recruitment and work with experts who ensure compliant stress-free Contract Recruitment!
