Divisive IR35 tax changes not dampening “skyrocketing” contractor demand - 57% increase in roles bucks widespread expectations -
SOARING demand for contract workers is far outweighing any impact of new tax changes, thanks in part to the mass movement towards remote and flexible working.
Although the introduction of controversial reforms to off-payroll working rules, known as IR35, were perceived as the “death knell” for contracting, many workers who chose to work in a non-permanent capacity are now finding themselves faced with a goldmine of lucrative opportunities.
Recruitment experts at Core-Asset Consulting have witnessed a 57% growth in demand for interim staff since this time last year as companies prepare to emerge from the pandemic, with flexible working creating even more competition for contractors across the UK.
Mike Stirton, Director of Interim, Temporary and Contract work at Core-Asset Consulting, which specialises in recruiting for Scotland’s vital financial sector, said: “While IR35 was a huge change when it was due to come into effect in April, it’s turned out to be nothing more than a storm in a teacup.
“In reality, it has created clarity for both companies and contractors, who are now in a much stronger position than they were a year ago.
“When the pandemic hit, companies took an understandably cautious approach and competition for interim work was fierce, with far more contractors battling for the small number of jobs available. As we moved through the pandemic, we witnessed a significant rebound of interim work from autumn onwards.
“This year, however, companies are finding themselves understaffed and behind on key deliverables in the wake of the pandemic, with fewer people with the key skills they’re looking for – creating an enormous demand for contractors.
“We’re seeing contractors’ rates increasing to accommodate the tax changes, which everyone appears to have accepted. Indeed, many of the larger financial services companies were prepared for IR35 last year.”
With remote and flexible working now the norm, companies now also face competition for interim workers on a UK-wide scale. This is pushing Scottish firms to compete with more well-paying companies in London, resulting in many firms increasing their rates of pay.
Mike added: “Firms are now losing out on key interim talent by not increasing their rates, because it no longer matters where you’re based. Scottish companies no longer have a monopoly on the rates here, which means that both the rates of pay and number of opportunities for contractors are increasing at breakneck speeds.
“IR35 proved to be simply an adjustment, and the demand for interim workers has skyrocketed – with no signs of slowing down, especially as we move through the still-unknown impacts of Brexit, which will see firms continue to reach out for interim staff across all areas of their business.”
The changes were designed to shift responsibility over the correct use of self-employed contractors onto businesses, with a view to cutting tax avoidance and exploitation.
With close to 20 years’ experience in temporary recruitment, in 2011 Mike joined Core-Asset to establish its Temporary and Contract division that provides contractors and temporary hires within the financial services sector. He is uniquely positioned to assess impact IR35 is having.
Core-Asset Consulting is Scotland’s pre-eminent recruitment and headhunting agency dedicated to financial and professional services. Based in Edinburgh, the £14m firm employs 22 people and works across the entire financial services sector, from the smallest boutiques to the biggest global players.
Initially the firm carved its reputation in Scotland’s globally-renowned asset management sector. However, the success of its model allowed it to expand across the wider financial services market.
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