What the Changes to IR35 Mean for Recruitment Agencies

As part of the September 2022 mini-budget, the government has announced that it will be repealing IR35. This effectively means that contractors will once again be responsible for determining their own status, effective from April 2023.

Let’s have a look at what the changes to IR35 mean for your recruitment agency.

What is IR35?

IR35 was designed to combat tax avoidance by contractors and freelance professionals. Introduced to the public sector back in 2017 and the private sector in 2021, the IR35 reforms meant that either the hiring organisation or recruitment agency was responsible for determining the status of a contractor or freelancer.

This meant that under the soon to be changing regulation, the fee-paying party (either the hiring company or recruitment agency) was responsible for identifying and managing the tax and national insurance status of the service provider – i.e., the contractor.

The government will repeal these reforms.

What do the changes to IR35 mean for contract recruitment?

On the whole, the changes to IR35 are welcome news for the recruitment industry, particularly those specialising in contract recruitment.

The repeal removes a barrier surrounding time to placement and will effectively allow recruitment agencies to place more contractors, however, it’s important to ensure contract candidates remain compliant and are well informed of their new responsibilities.

How can Firefish help?

Firefish maximises your contract recruitment efficiency by allowing you to source, place, extend and track all your contractors from one place.

Generate contracts, manage terminations and extensions, send candidate communications surrounding the upcoming IR35 changes and schedule follow-up tasks within your recruitment CRM to ensure all contract candidates have completed the required documentation.

Learn more about managing contract candidates on Firefish.

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Campbell Nelson

As Head of Marketing, Campbell oversees all the content and online marketing here at Firefish.

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