The Aftermath of IR35......The Era of Lifestyle Contractors
IR35 changes came into affect from 6th April 2017
It has been nearly 3 months since the changes to IR35: Off Payroll in the Public Sector were introduced and it’s fair to say that there has been a mixture of opinions, both good and bad. The IR35 changes were brought in on 6th April 2017 despite huge reservations from Contractors, Agencies and many other voices across the sector.
By now you will know that these changes mean that if you work using your own Ltd Company (PSC) your agency will have to make deemed employment payments on a weekly basis to HMRC via RTI to ensure you are paying the correct taxes. In short, contractors are no longer able to work on a low salary / high dividend model that most had chosen to use for many years. It has been a big shock to the system – Contractors are more and more often choosing to use an Umbrella Company to process their pay and many agencies in the Public Sector have reported a drop in contractor numbers, immediately affecting their income. There have been positives for Local Authorities though, especially from a Social Services perspective, with more candidates opting to become fully employed in permanent contracts, which will hopefully lead to more stable relationships and services to vulnerable children and adults; this can only be a good thing for the sector.
Many people, including agencies and contractors were up in arms on social media declaring the “end of contractors” in the public sector and an end to the flexible labour market as we know it. Has there been a negative impact on this side of the market? Of course. But now the dust has settled it is time to move forward and embrace the new dynamics for contractors across the UK.
Being a contractor in the public sector is now less lucrative than it once was, but with hourly pay rates generally starting at £27-£28 up to and beyond £45 it is clear that contractors are still earning well and above their permanent counterparts. There will always be the normal risks involved with contracting – if you don’t work, you don’t earn, pensions, holiday pay, etc – all good and valid reasons to be wary. The major positives about being a contractor in this new market? Lifestyle, lifestyle and yes, lifestyle!
Being a contractor, having the ability to choose where and when you work, trying different types of work without the limits of a permanent contract will always be an attractive point for a lot of people. The big point to remember is that there is still a crisis of supply for Social workers in the market. Vacancies are very hard to fill for permanent posts, so there is a real chance you could find long and stable contracts, which will give you the benefit of a stable income, but the flexibility to move on to something new should you choose to.
We are constantly taking on new roles for Social Workers, Senior Practitioners, Deputy Manager, Team Managers and Service Managers across the South East, so if you are looking for a new role, why not get in touch with our contractor desk? Our team are always available to discuss your needs and are here to personalise your job search.