Contractors looking for permanent roles in response to IR35 changes
One fifth (19%) of contractors are considering taking on permanent roles as the 6th April deadline for the changes to off-payroll working in the private sector approaches, according to Interim Partners, part of New Street Group.
Iain Pennell, director at New Street Group, said, “The impact of the new IR35 rules is going to be felt by a lot of contractors. Many are already preparing for that by looking for permanent roles instead.”
Contractors have also stated that communication from client businesses has been lacking surrounding how they plan to respond to the changes – 58% of contractors have received no contact. Almost a third (29%) of contractors are still not sure whether the changes affect them, but 40% expect their take-home pay to be reduced as a result of the changes.
Pennell commented, “IR35 rules are notoriously complicated and subjective, and the penalties involved will be very serious in a year’s time. There is still a lot of confusion among both individuals and businesses over how the system will work.
“It’s clear why so many contractors are looking towards permanent roles – they know that HMRC will be taking a much bigger slice of their income from April.
“The way this change is being implemented by the Government means that a lot of businesses are being forced to take the low-risk approach on how they classify their contractors for tax purposes. Unfortunately for contractors, the low-risk approach is also the high-tax approach.”
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