Demand for contractors expected to rise following postponed IR35 reforms

There has been a positive shift in the interest for contractors from firms, following the announcement of the postponed new off-payroll rules (IR35), according to recruiter Robert Walters.

The legislation, which was due to come into effect on 6 April 2020, relate to the use of temporary contractors, which would see every medium and large private sector business in the UK become responsible for determining the tax status of any contract worker. The new rules were designed to address perceived ‘tax abuses’ associated with off-payroll working. The announcement of a yearlong delay is part of a broad package of measures the Treasury has announced to protect the economy from the coronavirus outbreak. Chris Hickey, UK CEO at Robert Walters, said: “Whilst it is too early to predict how this will change hiring patterns for the next year, we have already noticed an increase in companies (and contractors alike) getting in touch with us following the announcement. Greater accessibility to contractors will no doubt help plug any short-term skills gaps we may likely experience in the coming months, as well as ease pressure on industries experiencing a particularly high level of demand.” Contractors represent approximately two million of the UK working population. According to a recent Robert Walters survey of 1,500 contractors, three quarters of respondents (71%) stated that they had considered becoming a permanent employee as a response to the pending changes to tax rules. Whilst only 5% of contractors admitted to having a plan in place with their client post-IR35, 20% did state that they had undertaken research and were in current conversation with their client at the time of the survey (January 2020).