Contractors working outside IR35 have increased 83 per cent since the introduction of IR35 reforms in April, a survey has found. According to the annual contractor survey from Qdos, out of 1,248 contractors who were polled, 64 per cent of them secured contracts IR35. However, only 22 per cent of participants said it had been easy to secure outside IR35 work, with 38 per cent reporting a lack of outside IR35 contracts.
Qdos CEO Seb Maley said: “The surge in contractors able to secure contracts outside IR35 since April will give many of these workers a boost heading into the new year. That the number of contractors being placed outside IR35 has nearly doubled is the first real indicator that more businesses are managing reform in a pragmatic way. It also shows that fewer firms are forcing everyone onto the payroll – a needless and expensive approach in more ways than one.”
This increase follows the roll-out of IR35 reform in the private sector in April this year, which saw the responsibility for determining employment status for tax purposes switch from contractors to the medium and large businesses that engage them.
However, Maley added: “There is still plenty of room for improvement, though. Outside IR35 contracts are on the up, but even so, lots of contractors are still struggling to source these. IR35 itself has also been earmarked by contractors as the biggest threat to this way of working next year.”
“In 2022, businesses that have banned contractors in response to reform should reverse these costly decisions, taking note of the rising number of firms benefiting from engaging them compliantly outside IR35.”
72 per cent of contractors responding to the survey highlighted IR35 as the event that had impacted them most this year, followed by the COVID-19 pandemic, which was cited by 20 per cent of respondents. The survey also found that 61 per cent of the contractors surveyed said that IR35 represented the biggest threat to their way of working next year.
