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Targeting IT Talent

IR35 Changes & Contractors Reactions

Speaking with a variety of IT contractors & consultants, I’ve found a range of reactions to the new Off-Payroll Working Rules in the Private Sector (IR35) which start on 6th April 2021.

There is no sign that HMRC will delay again or back down. The new rules mean the client, and not the contractor, will be responsible for assessing IR35 status and issuing a SDS (Status Determination Statement) for each contract role.

Assignments with a SDS of Inside IR35 means the fee payer will have to make tax and national insurance deductions before paying the personal service company / contractor. Assignments with a SDS of Outside IR35 means tax doesn’t need to be deducted before paying the contractor.

At this time, I’ve found many contractors will only consider contracts Outside IR35 while some don’t mind being Inside IR35 as they are more interested in the challenge of the assignment. Very few want to go into permanent employment and leave contracting due to IR35 changes.

It will be interesting to see how many contracts are available Outside IR35.

Interesting times ahead.

Posted 08.03.2021

Category: IT market news | For clients

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