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One in 10 firms to offer contractors full-time posts in response to IR35

Offshore workers arrive on their platform by helicopter
Offshore workers arrive on their platform by helicopter

The new AGCC report revealed that one in 10 firms will look to convert contractors into full-time employees in response to new legislation relating to off-payroll working rules.

AGCC research and policy director, Shane Taylor, said the results of the poll showed IR35 legislation may persuade firms to think about changing their organisational structures and the way they approach recruitment.

Mr Taylor also said the companies who were considering hiring contractors on a permanent basis were effectively making a “cultural change”, whereby they bring people in house and take a longer-term view of the workforce.

IR35 comes into effect in April next year, stopping contractors who are effectively employees of a company “disguising” themselves as freelancers to pay less tax.

The North Sea is among the industries that will be most drastically affected by the changes, as many individual contractors operate through intermediaries, such as personal service companies.

Tax experts have warned firms of the need to get their houses in order to avoid harsh penalties.

Fourteen-percent of respondents to the AGCC’s poll will consider reducing the number of contractors they recruit, while 13% will think about changing their recruitment policies.

Only 8% will try to negotiate on additional costs with the supply chain, and a mere 3% will look at increasing contractor day rates.

More than a third (37%) did not have any contractors and weren’t affected.

 

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Craigmill, Pitcaple, Inverurie, Aberdeenshire, United Kingdom, AB51 5HP
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