Research from Brookson reveals that recruiters which proactively engage with contractors around IR35 will have a competitive advantage.
Contractors don’t know who to turn to for IR35 advice, research from IR35 specialists Brookson Group reveals. When asked, over 7 in 10 of contractors (77%) said they didn’t know whether to trust their recruitment agency with helping them through the IR35 changes when they come into effect in April this year.
Contractor uncertainty is not just aimed at recruiters, however, with less than a quarter (22%) trusting that their hirers will make the right assessment of their IR35 status. Just 3% of contractors believe that the private sector will be ready when the new rules come into force.
“Lack of government guidance and uncertainty over the new rules has made it incredibly difficult for recruiters to provide contractors with the right advice,” says Matt Fryer, Head of Legal Services at Brookson Group. “With the 6 April deadline fast approaching, however, recruiters have a vital role to play in helping both candidates and clients to understand how the new rules will apply. In fact, many have already found themselves doing much of the heavy lifting when it comes to communicating the changes up and down the supply chain.”
Brookson Legal’s research indicates that recruiters who manage IR35 successfully will gain a competitive advantage in the next few months. Four in five of all 500+ contractors surveyed (80%) said that they are more likely to work with a company that has proper IR35 policies and procedures in place and that advertises roles outside of IR35.
Asked which options they are most likely to consider if they are assessed as being inside of IR35, on the other hand, 50% of contractors would ask for a pay increase and benefits and 21% would challenge the decision – highlighting that an honest and empathetic discussion will be required between all parties moving forward.
Matt Fryer, Head of Legal Services at Brookson Group, said: “Recruiters should be seeing this as an opportunity to establish themselves as a trusted adviser to their clients, with clear support and guidance helping to set them apart from other agencies which may be letting their contractors and businesses muddle through on their own.”
While recruiters will be helping contractors to navigate IR35 changes, they should also be advising their hirer clients and wider supply chain on the importance of taking reasonable care with their assessments. This is especially important for when HMRC turns its attention to enforcement after the new rules come into effect.
Matt Fryer concludes: “With such a short timeframe left to address IR35, recruiters will play a pivotal role in ensuring the changes are properly enforced and will also be answerable to HMRC when the time comes. It is therefore important that they educate themselves on their responsibilities sooner rather than later, so that they can properly advise their clients ahead of April.”
To find out more about the IR35 research amongst UK contractors and to download a copy of the latest Brookson Legal report Avoiding an IR35 talent drain.
If you are a recruiter and would like to discuss how we can support your agency pre and post legislation change, get in touch.