The number of contractors who have worked outside IR35 following the roll out of reform in the private sector has surged by 83% since 6th April 2021, research by insurance company, Qdos, has revealed.
Qdos’ annual contractor survey, which 1248 contractors participated in, shows that nearly two thirds (64%) of contractors have been able to secure a contract deemed outside of IR35 since reform.
This is an 82.8% increase on the contractors (35%) who had been placed outside IR35 by their end client in the lead up to and upon the arrival of the changes.
The data indicates that more businesses are getting to grips with the reform, which has seen the responsibility for assessing IR35 status shift from the contractor to medium and large businesses, with the fee-paying party liable.
Despite this, contractors said securing an outside IR35 role hasn’t been straightforward. Only 22% said it has been easy, 40% have not noticed any change in difficulty since 6th April, while 38% said there is now a scarcity of contracts classed outside IR35.
Due to this, IR35 reform was highlighted by 72% of contractors as the event that impacted them most in 2021, with Covid-19 some way behind (20%). And 61% still see IR35 reform as the biggest threat to this way of working in 2022.
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.
“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.”