Onrec logo The Online Recruitment Resource

Recruitment agencies can manage potential IR35 changes, despite fears.

As recruitment agencies, contractors and millions of private sector businesses gear up for a potential announcement in this month’s Budget on the future of IR35 in the private sector, Qdos Contractor of The Qdos Group has moved to quash speculation that incoming changes cannot be handled.

It is predicted the responsibility for setting the employment status of contractors working the private sector will be handed to recruitment agencies and the companies which engage them, similar to recent reform in the public sector.

APSCo research indicated that 78% of recruiters believe extending rules to the private sector would impact the UK’s ability to source flexible labour.

However, since April, the month of recent public sector IR35 reform, Qdos Contractor revealed 89% of contractors passed their rigorous and detailed IR35 contract and working practice assessments, and were able to continue working outside the rules.

Qdos Contractor research into 652 UK contractors highlighted:

  • 63% believe private sector changes could be managed
  • 61% feel that despite recent tax changes, including public sector reform, the independent workforce will continue to grow

Seb Maley, Qdos Contractor CEO called for calm and urged recruitment agencies to take the initiative should expected IR35 changes be announced in the Budget this month:

“Despite quite understandable concerns from recruitment agencies, likely changes to IR35 in the private sector can in fact be managed. We must use the public sector as a roadmap for managing expected reform in the private sector.

“Working with many recruitment agencies and public sector companies, our solution has allowed for the continued use of contractors. Should potential changes resemble public sector reform, we have a proven method to determine IR35 status accurately. 85% of contractors rightly do not trust HMRC’s CEST Tool to make accurate determinations, and assessments must be carried out by unbiased IR35 experts on a case-by-case basis. ”

“Preparation is key, and recruitment agencies must now take the initiative by opening discussions with the contractors they place, and begin to think about how they will contribute to well-informed IR35 decisions. The cost of blanket and inaccurate IR35 decisions in the sector would ultimately be huge to agencies and the UK’s millions of private sector companies.”