![\"\"](\"https:\/\/cdn-01.cms-eu-v2i.applyflow.com\/identifi-global\/wp-content\/uploads\/2022\/03\/ContractorShortage.jpg\")
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\n\tMany businesses are finding it difficult to fill contractor positions. But this isn\u2019t really because of a shortage of contractors. <\/span><\/p>\n \n\tContractors and hirers are actually at an impasse. IR35 rules have caused contractors to push up rates to accommodate reduced tax efficiency, and hirers to essentially reduce them since hiring contractors inside IR35 now comes with additional costs. <\/p>\n \n\tAnd unless companies embrace IR35 and learn to work with it, this problem is only going to get worse. <\/p>\n \n\tOur own Gary Fay and Peter Sanders believe that with the right knowledge, businesses can safely and easily hire contractors to work both inside and outside IR35. <\/p>\n \n\t\u201cHiring contractors is harder and more expensive than it used to be,\u201d Pete explains. \u201cAnd it’s probably going to get worse.\u201d <\/p>\n \n\t\u201cIf contractors are inside IR35, they’re pushing their rate up to accommodate the increase in tax. On the other side, employers hiring contractors inside IR35 have to pay those employment costs – like they would a normal employee. PAYE tax, National Insurance, possibly pension contributions, holiday pay – all the costs you didn\u2019t have to incur before.\u201d <\/p>\n \n\tIf a business foots the bill for the extra, a \u00a3500 day rate incurs an additional \u00a3150 cost. However if the contractor is expected to take a lower rate to allow the business to pay tax, NIC and other costs on their behalf, their day rate of \u00a3500 will be reduced to \u00a3350. <\/p>\n \n\t\u201cThis means that the inside IR35 model adds a \u00a3350 swing and neither the client or the contractor is willing to pick up the tab,\u201d Pete says. \u201cAnd this is before contractors push up their rate by 20-30% to offset tax losses. Hence the impasse.\u201d<\/p>\n \n\tAnd if neither side gives in, the situation will continue to stagnate. <\/p>\n \n\t\u201cBoth client and contractor need to find a medium ground,\u201d Gary says. \u201cUnless contractors are willing to reduce their day rate expectations and the client is willing to add a little more to the pot, nothing is actually going to get resolved.\u201d <\/p>\n \n\tThis increase in cost isn\u2019t the only reason businesses are hesitant to hire contractors. Many hirers are worried about falling foul of HMRC\u2019s new rules. <\/p>\n \n\tTo avoid the perceived hassle of proving their contracted roles fall outside IR35 rules, many companies are using a blanket approach and keeping contractors inside IR35. This means that they might be paying additional costs unnecessarily and slowing down the market \u2013 many contractors feel underpaid and undervalued when offered these positions. <\/p>\n \n\tGary and Pete argue that with the right knowledge, companies can easily offer contracted roles outside IR35. This would mean simply paying the contractor\u2019s day rate with no additional costs. <\/p>\n \n\t \n\t\u201cOne thing that has to change is the way organisations manage contractors,\u201d Pete explains. \u201cIf they start moving to deliverable based work, I think what we’ll see is companies getting more value out of their contractors – and a lot of them will be pushed outside IR35.\u201d<\/p>\n \n\tMoving to a deliverables based model is a big change for most hirers. It involves putting a lot of trust in the contractor and changing the way they\u2019re managed. Contractors working inside IR35 would be managed like an employee, with regular or daily contact and updates. Contractors working outside IR35 should be given more autonomy and asked to work to clear milestones. <\/p>\n \n\tWhile this is a large change, Gary and Pete believe it can be done. <\/p>\n \n\tCompanies need to embrace IR35 legislation and learn how to apply it. Those who use the new legislation who reset how their company uses temporary staff will succeed.\u201d <\/p>\n \n\t\u201cThey can use the legislation to drive more ROI from expensive contractors by making them more delivery focussed.\u201d <\/p>\n \n\t\u201cAt the same time, they can treat those who fall inside IR35 as they would any member of staff \u2013 bring them into the business and develop them.\u201d <\/p>\n \n\tIt\u2019s not surprising that businesses are put off by this huge change, though \u2013 put off by the apparent complexity of the problem. <\/p>\n \n\t\u201cNobody is working out where they want to be,\u201d Gary says. \u201cThey’re almost waiting for things to change. And I don’t think it’s ever going to change. The emphasis is on the clients to educate themselves on how to work with IR35 regulations.\u201d<\/p>\n \n\tFor many companies, the reason for their inertia comes down to a few factors \u2013 fear of getting it wrong, hassle, and financial cost. But they could actually save money and administrative burden by educating themselves and learning to work with IR35. <\/p>\n \n\t\u201cInterestingly, the cost of compliance, and doing it right, is far less than having a blanket inside IR35 approach,\u201d Pete explains. \u201cYou could hire a contractor outside IR35, fully compliant, with less risk, and actually reduce the cost of your project.\u201d <\/p>\n \n\t\u201cAs we\u2019ve said, that \u00a3500 a day contract has now become \u00a3650. If you multiply \u00a3150 by 240 days a year, that\u2019s quite a lot of money (\u00a336k per contractor). The cost of changing the contracted work to a deliverables based approach and managing a contractor outside IR35 is much less.\u201d<\/p>\n \n\tIt\u2019s understandable why businesses are currently struggling. Learning to work with IR35 requires time and effort. But doing so is the only solution to the problem hirers and contractors currently face.<\/p>\n \n\t\u201cIf you are a hiring manager and the lack of candidates is stifling your projects, go and talk to the appropriate person in the company – or learn about it yourself – and actually work for a solution,\u201d Gary says. \u201cBecause there certainly is one.\u201d<\/p>\n \n\t\u201cIt takes some up front work, but once you\u2019ve done it once you can replicate it for each contractor.\u201d <\/p>\n \n\tThere is no shortage of skilled contractors. Instead, there\u2019s a problem which has a clear solution. Provided you face IR35 head on, you actually have the power to find the right contractors for your projects, fire up the market, and ultimately create more efficient, long-term hiring and working models.<\/p>\n \n\tIR35 doesn\u2019t have to be difficult. Contract Complete can help you with every stage – from determining IR35 status to finding and managing contractors and all the way through to project completion. <\/span>Contact us to find out more<\/a>.<\/strong><\/em><\/p>\n Many businesses are finding it difficult to fill contractor positions. But this isn\u2019t really because of a shortage of contractors. Contractors and hirers are actually at an impasse. IR35 rules have caused contractors to push up rates to accommodate reduced tax efficiency, and hirers to essentially reduce them since hiring contractors inside IR35 now comes… Read More »How to navigate the contractor shortage created by IR35<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":14270,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[39],"tags":[],"class_list":["post-15040","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news-trends"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/posts\/15040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/comments?post=15040"}],"version-history":[{"count":0,"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/posts\/15040\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/media\/14270"}],"wp:attachment":[{"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/media?parent=15040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/categories?post=15040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.identifiglobal.com\/af-api\/wp\/v2\/tags?post=15040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\n\tThe contracting impasse<\/h2>\n
\n\t“The inside IR35 model adds a \u00a3350 swing”<\/strong><\/h4>\n
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\n\tCosts of only hiring within IR35<\/h2>\n
![\"\"](\"https:\/\/cdn-01.cms-eu-v2i.applyflow.com\/identifi-global\/wp-content\/uploads\/2022\/12\/Invoicing.jpg\")
<\/p>\n\n
\n\tHirers need to learn to work <\/span>with IR35<\/h2>\n
\n\t“Learning to work with IR35 requires time and effort”<\/strong><\/h4>\n
\n\t <\/div>\n\n\tImages via AdobeStock and Pixabay<\/a><\/em><\/div>\n","protected":false},"excerpt":{"rendered":"