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Will IR35 be a barrier to temporary talent?

Matt Weston

The majority of senior decision makers in medium and large-sized businesses are concerned about missing out on temporary talent ahead of the introduction of new IR35 regulation, according to new research. Contributor Matt Weston, Managing Director – Robert Half UK.

Three in five (62 percent) medium and large private sector businesses cite concerns about missing out on skilled contractors and temporary professionals when IR35 is expanded to the private sector from 6 April 2020.

After this deadline, every medium and large private sector business in the UK will become responsible for determining the employment status of any contract worker they use. If the contractor is deemed to fall inside IR35, the worker will be required to pay the National Insurance contributions and income tax due via PAYE or via an umbrella company.

Separately, two fifths (42 percent) of medium and large private sector organisations are concerned about losing current temporary workers to the new IR35 rules if they cannot renegotiate employment contracts in time. While only 15 percent plan to offer more competitive pay rates to their contractors to secure them.

Ahead of the introduction of the new regulation, one third (33 percent) say that the demand for temporary workers will increase, with just 7 percent anticipating a decrease.

Matt Weston, Managing Director, Robert Half UK commented: “Business leaders are concerned about the impending IR35 rules and its potential impact on the UK’s temporary talent pool, particularly as firms look for a blend of high performing temporary and permanent employees to pursue growth strategies in 2020.

“A number of businesses are already considering measures to stay compliant with new regulation and finding ways to compete for skilled talent who favour flexibility and autonomy. With the UK competing with other international centres for the world’s top talent, working with a specialist temporary recruitment consultancy that is able to attract and secure contractors who are willing to adapt to the new rules will be crucial for their ongoing success.”

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