Searchability Spotlight: Contracts & IR35

With the recent changes in IR35 we sat down with our Contracts team: Olly Preston our Contracts Director and James Gambino the Contracts Manager to discuss all things IR35. 

Here is the interview alongside questions and answers.

What is IR35?

So as of April the 6th this year if you are a Medium to Large size Organisation you’re now going to be responsible for determining a contracted status either inside or outside of IR35 depending on the work practices.

Which organisations are affected?

It is key to point out at this point that the changes don’t apply to every organisation if you are considered a small enterprise and with either less than 50 employees, a turnover of less than 10.2 million or a balance sheet of less than 5.1 – this will actually not apply to you and the responsibility of determining that status will remain with the contractor themselves.

How does IR35 impact a contractor?

So there’s obviously a million and one questions that we could cover here and but I’m keen to just focus on the keynotes. If you do have any additional more pertinent questions that I haven’t got the answers for we do have a Searchability Consultancy that can help answer any of those unanswered questions. I think the key thing to take away from this is that if you are a genuine freelancer or self-employed contractor nothing changes. You know if you’re outside you’re outside if you’re inside you’re inside, but there are a lot of factors that can affect those things. Obviously, the imminent change is that in the past you’ve always been responsible for determining yourself inside or outside that will now fall with the organisation as of April 2021.

What organisations need to do following the IR35 changes?

Okay so obviously the deadline has passed so you guys with existing contractors should obviously already have your ducks in a row. But those either engaging with contractors for the first time or looking to engage with contractors on new contracts from now need to be aware of a few things in particular. Firstly, I think it’s absolutely key that you assess each contractor on an individual basis and consider the working practices of that engagement. We don’t want to be in a position here where you’ve got five contractors and you’re deeming them all out inside or outside, ensure that each contractor is dealt with on an individual level. Of course, there are a lot of clients out there who are either unsure and don’t have the information that they need or perhaps have given something like the CEST tool go and then got an inconclusive result. I think those people or those clients need to ensure that they are considering a few factors in particular.

What are the key IR35 factors to be aware of?

There are obviously a lot of factors to consider here. Our Consultancy can cover in more detail, deeming contract inside or outside does tend to revolve around three clauses in particular. One being the substitution cause, effectively to have a genuine outside of IR35 contract the client would need to be willing to accept a reasonable substitute. There’s the Direction, Supervision and Control clause which effectively states that our contractors should be allowed to complete the work in their own hours, in their own time, in any location that he or she likes. Then there is the Mutuality of Obligation clause which again basically a client shouldn’t feel obliged to give a contract to work after a project has been delivered at that point the contractor is entitled to just move on. I think the key area to take from this is all about reasonable care. You guys as clients need to ensure that you are carrying out reasonable care in order to determine that status as accurately as you can.

What is the market like right now for IT contractors?

Despite the changes to IR35, we have noticed that the contract market is still very buoyant and definitely picking up. Obviously, the last 12 months have not been the easiest of times but we have noticed over the last couple of months that there is definitely a spike increase to contract opportunities available. Personally, I’ve had probably one of the best ones I’ve had recruited for contractors over the last couple of months anyway. I know as an organisation this is definitely true. In regards to the roles that I’ve been working recently, there’s been a number of Software Development opportunities specifically kind of PHP positions and placed a number of Software Testers as well. There is across the board a number of contract opportunities and a number of clients who are looking to bring in contractors so all good news all positive news for contractors despite the changes with IR35.

How could an IT contractor benefit you as an organisation?

So there’s a number of reasons why a client may want to utilise the skills of a contractor. For instance an urgent project there’s a project specific that needs delivering or specialist skill something a little bit more niche. In regards to the clients that we work with we’ve assisted on contractors from all of these three areas as well as others now what the contractors can provide and what they can bring is immediately available you’re not waiting around for a month or two or three months for that person to come in and deliver on the project there immediately available good to go they’ll hit the ground running, they’ve worked on projects of this nature and different range of clients and different projects so they’ll be able to come in hit the ground running and start delivering from day one. Also, they are specialists in their area they have worked with as mentioned a range of clients throughout different sectors from different companies they’re seasoned professionals and no matter what the reason for the contractor we have contractors that are working inside IR35 at the moment and outside IR35. So no matter what the requirements we’ll be able to find you the right contractor for your specific needs.

Why choose Searchability?

At Searchability, we have a contracts team which is 12 strong recruiting across a number of verticals, location and tech stack with anything in the IT and Digital space. As a contracts department, we do look to get 3 options no matter what the role over within 24 hours. So if you want to discuss anything contract related please feel free to reach out get in touch and if there’s anything you want to discuss around IR35 also drop us a call drop us an email be happy to assist!

Get in touch, all of our contact details are on our website.

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