IR35 Off Payroll Skills Shortage Solution

How IR35 off-payroll contractors might just be the answer to the current skills crisis in construction

IR35 (also known as the off-payroll working rules) has been a constant and often misunderstood discussion point for the last few years. When it comes to recruitment mention outside IR35, the perceived risk is often a major concern. 

Hearing the words IR35 can be off-putting. We often hear concerns along the lines of: 

“If I employ an outside IR35 contractor who is liable if something goes wrong?”

“How do I know whether they have been assessed correctly?”

“It just feels so much more complicated than PAYE – what happens if I get it wrong?”

Combining these doubts with the Government’s decision to back track on the off-payroll working rules means that outside IR35 contractors are often overlooked in the shrinking talent pool. Larger companies have even introduced “blanket bans” on outside IR35 contractors. Simply, IR35 becomes a word for concern in the construction industry.  

But why is IR35 so off-putting?

Given the ever-growing shortage of skilled staff in the construction sector, the question needs to be asked. Are you missing out on industry leading talent because you’re actively avoiding them? 

At LDNY People, we think that with the right knowledge and understanding, you can easily reap the benefits of outside IR35 contractors, which we believe can largely outweigh the minimal risk to your business.

LDNY People can help you understand and manage the risk of IR35 with our practical and unbiased advice. To help, we’ve put together the below checklist of key points to consider and questions to ask before choosing your recruitment partner when it comes to understanding IR35.  

Are the contracts IR35 compliant?

Your recruitment partner should be able to provide you with contracts provided by IR35 specialist lawyers, this forms a key part of the assessment process. 

What about project specific scope of works?  

Another important part of the process is ensuring contractors are issued an accurate scope of works, specific to the project they are brought in to do. It is also important to ensure contractors are only working on projects they are scoped to work on, and not given additional work outside of the agreement. 

How is managing contractors different from PAYE?

It is important to understand that IR35 contractors need to be managed differently to PAYE personnel, and clear rules must be adhered to. Your recruitment partner should give you advice on this. 

Which assessment tools are the best?

There are a number of different Check Employment Status for Tax (CEST) tools available online, some are far more accurate than others. Ensure you are using an assessment tool offering accurate status determinations, again your recruitment partner should be able to advise you on this. 

Who needs an SDS?

All contractors should be issued an SDS (Status Determination Assessment). This should also be approved by the contractor, based on an agreed scope of works.

How can LDNY Help?

LDNY people believe outside IR35 contractors can provide a flexible fixed cost resource to help you deliver your projects to the highest possible standard, whilst ensuring you have access to market leading industry talent. 

For advice on IR35 regulations, understand the guidelines in more detail, or to discuss if outside IR35 contractors are the right solution for you, please contact Dean Parry, Head of Delivery LDNY People.

Get in touch!