IR35: Challenges and Opportunities

71% of contractors are looking for outside IR35 roles: what can recruiters do?

It’s become one of the biggest challenges in contractor recruitment – contractors are hungry for outside IR35 roles, but there…

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It’s become one of the biggest challenges in contractor recruitment – contractors are hungry for outside IR35 roles, but there simply aren’t enough end clients offering them. The disparity is striking: in our recent IR35 survey, 71% of contractors told us that they are interested exclusively in outside IR35 roles for the next 6 to 12 months, yet these account for less than 41% of roles on offer.

How can recruiters help to close this gap – getting more contractors into the roles they want while helping end clients attract the very top contracting talent? In this blog, we offer some advice to staffing businesses on the role they can play in moving this important issue forwards as IR35 becomes business as usual.

Educate and inform

There is a real need in the sector for more education around IR35 to address the issues still being experienced. A better understanding of IR35 would be much healthier for the sector as a whole – and would be of huge benefit to individual end clients as they can tailor their opportunities to be more attractive to the most skilled and experienced contractors.

Kingsbridge, as IR35 specialists, can support the entire supply chain. We can hold the hand of recruiters to help them to provide personalised support and guidance to end clients on how to create roles outside IR35 and ensure that contracts and working practices conform with the law.

This should reassure clients who are nervous and uncertain about IR35 and prevent ongoing damaging practices like blanket bans on contractors who can and should be able to legitimately work outside IR35.

Similarly, there are likely to be simple changes that some of the contractors on your books can make to ensure that they are compliant and clearly operating as a business on their own account – such as having a business website, working for more than one client and checking they have the ROS in their contracts.

Holding business insurance demonstrates that their company has its own ‘financial risk’. Make sure you also let your end clients know about the Kingsbridge IR35 insurance.

Our insurance, when held by contractors, is the only policy that flexes to protect whoever is deemed liable in the event of an HMRC investigation. Consequently, holding this policy may help provide an extra feeling of safety to anxious end clients.

The tips above will support contractors who are starting to feel despondent about the lack of outside roles – showing them that some of the power is still in their hands.

Put pressure on the system

One thing that we think would make a huge difference and provide a great deal of reassurance to the whole market would be for a reform of CEST – the government’s own employment status determination tool.

We’ve blogged before about why we think that CEST in its current state isn’t fit for purpose and despite multiple commentators and government reports calling for updates, we have yet to see any improvements. In particular, we have been continually pushing for CEST to take MOO (mutuality of obligation) into account.

Time and again in case law, judges have explicitly delved into the conditions of MOO – with tribunals investigating the distinction between “a contract for services” or “a contract of  service”. It seems bizarre then that CEST overlooks this key status test by only being interested in MOO in the most general sense – assuming that MOO exists by virtue of there being a contract of any kind in existence.

Recruitment firms can lobby for change on this issue. If CEST were a more accurate tool, end clients would be reassured rather than confused by its results, and might be more likely to advertise outside IR35 roles.

Advise on the best process for status determination

Try to demonstrate to end clients that investing in their approach to status determination will reap dividends very quickly in terms of the quality of talent that they can attract to support their projects.

Sometimes, when end clients aren’t willing to advertise outside roles, it’s because they’ve not received expert advice and so are interpreting the law over-cautiously.

As a recruiter, you are really well-placed to advise your end clients on how to put in place a process for IR35 status determination that is robust, rigorous but fair. One easy way to do this is to point them in the direction of more comprehensive tools for status determination – such as the Kingsbridge Status Tool.

As the only hybrid status tool on the market, the Kingsbridge Status Tool offers the simplicity of an online questionnaire combined with expert advice and support for indeterminate or borderline results. When your clients have the right tool for the job, and professional support on their side, they will be equipped to see the full potential for legitimate outside IR35 positions.

Get the right support

IR35 consultancy can be another way for end clients to seek tailored advice on how to legitimately have more outside roles. And finally, having the safety net of IR35 insurance can be a decider in the game.

Either end clients could require their contractors to hold it, or you as a recruiter could take the initiative and invest in cover for all of your clients. This also offers protection to your business, as the fee-payer, in the event that an investigation takes place.

Kingsbridge are always here to support our recruitment partners and their end clients. For more information about our IR35 support for staffing businesses, or to find out how you can team with us to earn rewards on contractor insurance policies, visit our partnerships page and get in touch with our friendly insurance specialists.

This article has been written by our IR35 team experts and does not constitute advice but is for information purposes only.

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IR35: Challenges and Opportunities Partners