HomeBusiness NewsJust 4 to 5% of contract job roles include IR35 status ahead of deadline

Just 4 to 5% of contract job roles include IR35 status ahead of deadline

by LLB Finance Reporter
1st Apr 21 12:59 pm

IT and computing sectors leading the way compared to engineering, insurance and finance. Research from Brookson Legal, based on data from Jobfeed by Textkernel, reveals that 95% of job advertisements for temporary contract roles do not include the role’s IR35 status ahead of the new tax rule April 6th deadline. This is despite previous research indicating that four in five of contractors are more likely to work with a company that proactively advertises roles that are outside of IR35.*

• Jobfeed data on adverts posted for temporary, contract and freelance contract types reveals just 4-5% (1,988) of the 44,850 roles advertised mention IR35 w/c 8 March 2021
• The delay to the introduction of the off-payroll tax rules is reflected in the data. This year businesses are more prepared – with 58% more job advertisements that tag IR35 for temporary, contract and freelance contract types than the same week in 2020.
Looking at temporary, contract and freelance contract types:

• 24% of IT and computing jobs included IR35 status w/c 8 March 2021 highlighting the sector is more prepared for the incoming changes, while engineering, finance and insurance lag behind in stating IR35 status on their job ads
• Engineering roles mention IR35 increased from 11% in March 2020 to 12% in March 2021
• Insurance and finance sector lags behind with only 6% of job roles stating IR35 status while only 3% of construction roles mention IR35
Matt Fryer, Head of Legal Services at Brookson Legal, the only Solicitors Regulation Authority accredited IR35 specialist law firm, said: “Although it’s understandable that the number of businesses currently indicating IR35 status on job ads is low, it is a growing trend and we expect this to increase significantly as we pass the IR35 6th April deadline.”

“Under the new rules, businesses have a responsibility to inform contractors of their tax status for each project. Ensuring clarity on IR35 in adverts for new roles demonstrates that your business has understood and is actively complying with the legislation. As demand for flexible workforces grows to support the pandemic recovery, this could be a key differentiator for hirers seeking to recruit flexible talent in a competitive job market.”

Previous Brookson Legal research indicated that four in five of all contractors (80%) are more likely to work with a company that proactively advertises roles that are outside of IR35 and has proper IR35 policies and procedures in place.* JobFeed data has revealed that job ads tagged “Inside IR35” have increased by 73% since March 2020, while jobs tagged “Outside IR35” have increased by 50% in the same period.

Fryer added: “Advertising roles outside IR35 makes them an attractive prospect for high skilled contractor talent. With April on the horizon, and the prospect of economic recovery in sight, businesses need to act quickly now to ensure IR35 compliance if they wish to secure the best people to deliver new projects and scale up operations.”

Commenting on the sector data, Fryer said, “Public sector tax changes introduced in April 2017 have ensured that the IT and computing sector has a more mature approach to IR35. But it’s clear that construction and finance lag behind – and worryingly, in these sectors we’ve seen the widespread use of a blanket ban approach to contractors working under Personal Service Companies.

“This may lead to compliance issues further down the line, as well as the loss of contractor of talent, surprise tax bills and even HMRC fines. While there may not be enough time to address these issues before the deadline, it isn’t too late to get the wheels in motion the first year of the new legislation.”

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