IR35 – April 2021 and beyond

It’s now almost 12 months since the IR35 Off-Payroll Reforms were due to take effect.

Many businesses had invested time and money into preparations for the 6th April 2020 with collaborations, new systems and updated procedures only for the legislation to be deferred due to the pandemic.

With the reforms now in play, what should businesses be doing, and what should business as usual look like?

IR35 – Prepared and ready?

With the IR35 reforms now in effect, businesses still preparing can take some solace in HMRC’s announcement about a “light touch” introduction. Whilst it is imperative that businesses take action, genuine mistakes will go unpunished for the first 12 months following the introduction.

In a previous article, IR35 —  deferred, not defunct! Workr Group outlined the changes in responsibilities for engagers and recommendations on what HMRC expects from engagers concerning processes and responsibilities. Now that the reforms are in effect, engagers should be doing the following:

Status Determination Statement (SDS)

The IR35 changes state that the engager must make a status determination and take reasonable care in doing so. The status determination is required to ensure that the correct taxes and deductions can be calculated and made in accordance with the legislation.

According to HMRC’s Employment Status Manual (ESM10013), a valid Status Determination Statement must:-

  • state in the SDS whether or not the worker would be an employee or office holder, or is an office holder, for tax and NICs purposes if they were directly engaged by the client,
  • provide their reasons for coming to that conclusion, and
  • have taken reasonable care in coming to their conclusion (see ESM10014)

It is essential for engagers to note HMRC’s stance regarding reasonable care as follows:-

“If the client fails to take reasonable care, the responsibility for the deduction of tax and NICs, and the payment of the apprenticeship levy and paying these to HMRC will rest with it. That liability will always remain with the client unless it takes reasonable care in reaching its conclusion set out in the SDS.”

Reasonable Care

By reasonable care, HMRC means that the status determination must be thorough and detailed, giving an accurate and clear representation of the work to be carried out by the contractor (worker). 

HMRC recommends that you formalise and record a consistent process, seek professional advice and assistance, involve relevant parties or individuals, use a determination test tool and define and communicate a transparent process for challenges.

Determination test tools

HMRC released its Check Employment Status for Tax (CEST) tool some time ago, but this has proved inconclusive for many assessments, even in some of HMRC’s own test cases.

However, suppliers in the industry have constructed several other tests using case law examples, representing credible CEST alternatives.

Insurance

Many engagers who want to continue to utilise contractors have stipulated a need for IR35 insurance within the supply chain.

A comprehensive insurance policy that supports a robust determination process should eliminate almost all liability from engagers and put them in a prime position to attract the best contractor talent for those assignments identified as outside of the legislation.

Challenge process

Contractors and agency suppliers must have the opportunity to challenge an assessment, whether inside or outside of IR35.

Failure to consider or respond to an SDS challenge will likely be regarded as a lack of reasonable care by HMRC. This would significantly increase the risk of liability should HMRC find an assessment to be incorrect.

6th of April 2021 and beyond – Business As Usual (BAU)

Businesses should not underestimate the benefits of having a defined, robust and documented process for IR35 assessment.

Engagers prepared to invest in some simple processes and procedures, along with the support of compliant suppliers, can quickly and easily mitigate the risks posed by the new legislation and meet HMRC’s requirements.

As with any other supply chain for products or services, some good due diligence and common sense will allow businesses to carry on with business as usual, utilising contractors effectively and productively.

In contrast to businesses that have changed policies or made blanket statements, engagers will benefit most from the choice of exceptional contract talent available to them due to their fair and credible approach to IR35.

IR35 – Act now!

We encourage anyone with a responsibility for IR35 compliance to ensure that your determination process is fit for purpose and meets HMRC’s reasonable care requirements. To learn more about this you can join Workr Compliance and STR Group at 4pm on Wednesday, 5th May for a webinar reviewing the landscape post 6th April and to gain key advice for maintaining BAU in the months ahead. 

If you are unable to make the webinar our specialist team can provide impartial advice and support to help you meet your reasonable care responsibilities. For a free, no-obligation audit and assessment of your IR35 compliance process, you can speak directly with Andy Webster on 07827 810851 or at aw@workrgroup.com.


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IR35 reforms to get a gentle introduction

With IR35 Off Payroll Private Sector Reforms coming into effect on the 6th April 2021, HMRC has confirmed what it describes as a soft landing for affected parties for the first 12 months following implementation.

As businesses prepare with procedures and assessments in readiness for the reforms, they can take some solace from HMRC’s recent publication pledging its support for parties affected.

For the twelve months following implementation, HMRC has confirmed that it will take a “light-touch approach” to penalties. The publication goes on to state, “customers will not have to pay penalties for inaccuracies in the first 12 months relating to the off-payroll working rules, regardless of when the inaccuracies are identified, unless there’s evidence of deliberate non-compliance.

HMRC support

With effect from the 6th April 2021, the responsibility for IR35 determination will shift from the contractor to the engager. To help support this transition, HMRC established a specialist team and created an educational programme for all parties affected by the change.

The light-touch approach to penalties and commitment not to investigate returns for years before 2021/2022 has reassured parties that there will, at least, be a reasonable period for adaptation. See our recent blog, IR35 – Soft landings and support for a more detailed overview.

It’s reasonable to assume, therefore, that HMRC is expecting teething problems.

Concerning mistakes, HMRC states that “a mistake for the purposes of the off-payroll working rules may mean that you have not met some or all of your responsibilities, or have paid more or less tax and NICs than is due.” 

“Mistakes can include payments being made to contractors without the correct deductions being made or making inaccurate employment status determinations.”

The focus here seems quite clear; make reasonable and accurate determinations and make the relevant and correct deductions appropriate to the determination.

HMRC has encouraged businesses to be vigilant and self-police their IR35 procedures, committing to supporting and assisting businesses who identify and admit mistakes once identified. In response, HMRC has said that they will work closely with engagers and agencies to understand and identify how the mistake has been made and support them to rectify any errors without imposing penalties.

While this approach may seem reasonable and supportive from HMRC, the added scrutiny and attention it may bring may not be quite as welcome. 

Reasonable care and compliance

It is unclear as yet as to how HMRC will approach governance and compliance as a whole.

RTI requirements already provide them with much of the information required to understand where the larger contractor populations reside. It would seem likely that HMRC will look first to those areas where they believe there is a higher risk of non-compliance or avoidance.

We believe this will be the root of HMRC’s approach. Tax avoidance and deliberate non-compliance will most likely be the key issues that HMRC will want to expose and eradicate.

There may be some “heat” for organisations where mistakes occur but, for those businesses trying to do the right thing, a sensible and documented approach should be more than enough to satisfy HMRC’s requirements.

Where engagers take reasonable care in their determination process and where mistakes occur, take reasonable steps to avoid repeat or new errors, it’s reasonable to assume that HMRC will focus their efforts elsewhere.

Get it right first time

Whilst HMRC has committed to a soft touch introduction, the risk and liability for getting things wrong remain.

Organisations in the supply chain have already seen an increase in the administrative burden due to the changes. They are unlikely to welcome any additional scrutiny as a result of an HMRC investigation.

The easiest way to avoid this scenario is to get the process right first time!

It’s not too late, but with time quickly running out before the 6th April introduction, organisations need to act decisively to ensure that they have taken reasonable care in their approach to compliance. To avoid any risk of complicity in tax avoidance schemes, they must also have absolute confidence in their supply chain.

To help meet your reasonable care responsibilities concerning IR35 compliance and tax avoidance schemes, Workr Groups specialist team can provide impartial advice and support in preparation for the reforms.

For a free, no-obligation audit and assessment of your IR35 compliance process, you can speak directly with Andy Webster, Founder and Director, Workr Compliance, on 07827 810851 or at aw@workrgroup.com


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HMRC rectifies conditions of liability oversight in readiness for IR35 changes

Last year, HMRC made some minor last-minute changes to the Finance Act 2020 in preparation for the implementation of the IR35 reforms.

Without seeking consultation from sector stakeholders, HMRC amended the conditions of liability (COL) for a company intermediary in an attempt to prevent avoidance of the off-payroll working rules.

By reducing their shareholding to less than 5%, workers providing their services via an intermediary would remove the conditions of liability required for the off-payroll working rules to apply.

Therefore, the government felt it necessary to close this loophole by clarifying the conditions of a company intermediary.

Changes went beyond the intended scope

Whilst wholly unintended, the subsequent changes made to the Finance Act 2020 extended the scope of the conditions for an intermediary. In the words of the government, the changes “went beyond the intended scope of the policy”.

Different intermediaries such as partnerships or incorporated limited companies have different conditions of liability. In the original IR35 legislation, the intermediary conditions of liability stipulated that the worker must hold a material interest (5% or more) in the intermediary.

The legislation also required the worker to disclose to the engager that it held a material interest in the intermediary. Where the worker failed to provide the information, the engager was to assume that the worker held a material interest.

However, whilst the material interest condition remained the same, HMRC added two further conditions as follows;

Where the worker receives a chain payment.

Or

Where the worker is entitled to receive a chain payment.

When strictly applied, these added conditions meant that any worker providing services via an intermediary where a chain payment is received would fall within the scope of the legislation. The unintended consequences being that some self-employed or even employed workers would fall within the scope of the legislation.

HMRC announced a commitment to addressing this oversight on the 12th of November 2020. On 3rd March 2021, HMRC published a policy paper stating that the scope of this condition was wider than the policy intent. It confirmed that it would have caught any arrangement where the worker operates through a company, even if the full payment had already been taxed as employment income (such as where the worker is operating as an employee of an umbrella company).

Operating as intended

Having published its policy paper, HMRC confirmed its intention to amend the conditions of liability again to limit the scope of the condition to cases as follows;

Where the worker holds a material interest.

Or

Where the worker holds less than a material interest in the intermediary and the payment received by the worker for the services provided is not already taxed wholly as employment income.

Additionally, HMRC has extended the requirement to confirm whether the conditions of an intermediary are met to the intermediary as well as the worker. The change is intended to make it easier for parties in the supply chain to confirm whether the worker is potentially subject to the IR35 off-payroll working rules.

The provision of fraudulent information was also extended to any UK-based party in the labour supply chain, rather than just the worker or someone connected to them. This is aimed at preventing deemed employers from facing a liability where they have been provided with fraudulent information by another party in the chain.

 

Subscribe to the Workr newsletter to hear updates as they happen

 

We are currently awaiting the confirmed wording of the technical changes and will provide an update once published.

For queries regarding the above technical changes or any other IR35 related issues, Workr Group has a specialist IR35 team that can support and advise you.

You can speak directly with Andy Webster, Founder and Director, Workr Compliance, on 07827 810851 or at aw@workrgroup.com.


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IR35 – Soft landings and support

With no mention in the budget, and following its latest update on the IR35 Off Payroll Private Sector Reforms, HMRC has all but confirmed that the reforms would come into effect on the 6th April 2021.

Confirming what it describes as a soft landing for affected parties for the first 12 months following implementation, HMRC emphasised compliance and support in its update.

In essence, this means that HMRC will take a lenient approach with parties where they believe genuine mistakes are made during the process. For the twelve months to the 5th April 2022, HMRC states that it will not issue penalties where it deems the error genuine. It will, however, still pursue any perceived outstanding tax liabilities.

Soft landings and support

IR35, also known as the Intermediaries Legislation, is tax legislation aimed at tackling tax avoidance. 

The earnings of workers providing their services and expertise to a client via an intermediary, such as a limited company or personal service company, are subject to income tax and National Insurance Contributions (NIC’s) if caught by IR35.

With the responsibility for IR35 determination shifting from the contractor to the engager once the reforms take effect, HMRC has established a specialist team and created an educational programme in preparation for the changes.

Emphasising its desire to ensure that people pay the correct taxes through education and support, HMRC has confirmed that it will take a “light touch” approach to penalties in the first twelve months following the implementation of the IR35 changes.

In its policy paper, issued on the 15th February 2021, HMRC stated: “You will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months of the operation of the new rules unless there’s evidence of deliberate non-compliance.”

HMRC also went on to confirm that “We have also committed that we will not use information acquired as a result of the changes to the off-payroll working rules to open a new compliance enquiry into returns for tax years before 2021 to 2022, unless there is reason to suspect fraud or criminal behaviour.”

Compliance and anti-avoidance

Whilst these commitments will re-assure those parties concerned with prior years investigations and ambiguity around determination processes, we still urge parties to proceed with caution.

Implementing a specialist team is a clear indicator of HMRC’s determination to tackle tax avoidance and compliance.

In publishing its compliance principles, HMRC clearly states its support for those customers trying to do the right thing and complying with the rules, which we interpreted as taking reasonable care, following guidance and enlisting professional help where required.

It was also clear in its approach to tax avoidance and non-compliance. HMRC committed to challenging deliberate non-compliance and schemes that claim to avoid the off-payroll working rules or otherwise reduce the tax payable.

For those engagers or other organisations in the supply chain who fail to take reasonable care or comply with the legislation, the landing may not be quite as soft as it sounds.

Does a soft landing mean no financial risk?

Absolutely not.

By soft landing, HMRC means that it won’t financially penalise organisations for genuine mistakes. However, it will still pursue any unpaid taxes through the supply chain if a mistake is made.

With time quickly running out before the 6th April introduction, organisations need to act decisively to ensure that they have taken reasonable care in their approach to compliance. To avoid any risk of complicity in tax avoidance schemes, they must also have absolute confidence in their supply chain.

To help meet your reasonable care responsibilities concerning IR35 compliance and tax avoidance schemes, Workr Groups specialist team can provide impartial advice and support in preparation for the reforms.

Engagers or end users can find out more by registering for our free webinar on the 11th March 2021 via the following link:

Use the link to access a free recording if you can’t make the date.

Alternatively, you can speak directly with Andy Webster, Founder and Director, Workr Compliance, on 07827 810851 or at aw@workrgroup.com.


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IR35 insurance – Who needs it?

HMRC has issued its latest update on the IR35 Off Payroll Private Sector Reforms, all but confirming that the reforms will come into effect on the 6th April 2021.

HMRC has confirmed what it describes as a soft landing for affected parties for the first 12 months following implementation, emphasising compliance and support. In essence, this means that HMRC will take a lenient approach with parties where they believe mistakes made during the process are genuine.

Whilst this represents an olive branch from HMRC to assist with the impact of the IR35 private sector reforms, many large scale engagers, in the financial sector, for example, have still adopted an ultra-cautious approach and made policy statements ruling out the use of personal service companies.

So how can insurance play a part in changing this thought process?

Risk-averse to new responsibilities

With the reforms shifting responsibility for IR35 determinations from contractor to engager, many engagers have taken an ultra-cautious approach in response.

Even though the immediate financial liability will sit with the fee payer (possibly the engager but more likely the agency), the reforms clearly state that the engager retains responsibility for taking reasonable care in how they handle the process. Failure to do so could still land liability square at the engagers door.

This stipulation and responsibility seem to have been a step too far for some engagers. Ironically, this is even the case for some of the financial service organisations that provide insurance policies for off-payroll workers against IR35-related investigations.

Compliance and insurance

The challenge for engagers is how this approach will affect their capability to attract and retain the flexible talent they have utilised and relied upon previously.

The consensus suggests that contractors will seek assignments deemed outside of IR35, either with small businesses where the reforms do not apply or medium to large businesses with a fair and reasonable determination process.

The alternative, if a PAYE solution is the only choice, is a significant hike in rates and cost to the engager. Neither of which would seem very appealing propositions due to the potential cost of business lost or reduction in profits.

However, a robust compliance process underpinned with a comprehensive insurance policy could eradicate almost all of the engager’s risk. Indeed, engagers with a robust due diligence process and some qualified, professional support should have little trouble identifying a supply chain and process that includes an insurance provision.

Engaging with fee payers with insurance protection should leave engagers with very little to fear from HMRC’s transfer of debt provisions and everything to gain from a talented contractor workforce keen to provide their services.

IR35 insurance policies can be hard to come by, such is the ambiguity surrounding the legislation. In fact, some insurers are even reluctant to provide cover where the government’s own CEST tool is used to conduct determinations.

Policies will therefore fall into one of two categories. One will be policies that contain weak prospect of success clauses that effectively provide underwriters with an opt-out if they deem the case weak. Engagers should avoid these policies wherever possible.

The others will be policies provided on the strength of the compliance process and will usually include First and Upper-tier tax tribunal representation, cover for previous tax years for up to six years, and cover all defence costs, including liabilities and penalties.

All of which should give engagers confidence and peace of mind that the risk of engaging contractors outside of IR35 is mitigated.

What now?

Our Founder and Director of Workr Compliance, Andrew Webster, recently hosted a webinar with Markel Tax on IR35 insurance. For a complimentary recording of the webinar, please follow the link – https://workrgroup.com/demystifying-off-payroll-working-for-the-entire-contractual-chain-whilst-protecting-your-interests/


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Around IR35 in eighty days

Workr Compliance is an impartial consultancy that provides advice and support on IR35 and the compliant management of a freelance contractor workforce. So, you’ll be right in thinking, what that has to do with a story written in the mid-1800s?

If you’re unfamiliar with the title, Around the World in Eighty Days is an adventure story written by the famous French author, Jules Verne. It was first published in France in 1872 and followed the story of Phileas Fogg, a wealthy, English eccentric from London. Fogg accepts a wager with his friends at the aptly-named Reform Club that he can circumnavigate the world in 80 days.

So what has this got to do with IR35? Well, if your business utilises freelance contractors, you’ve now got less than 80 days before the IR35 legislative reforms take effect in the private sector. And, like Phileas Fogg, who gambled £20,000 (over £2M today), you’ll be taking a substantial financial risk if you fail to prepare appropriately. 

There’s just no way of getting around IR35 — it’s here to stay.

You’ve prepared for the reforms already, haven’t you?

The IR35 reforms were originally due to take effect in April 2020, so many businesses have already taken steps to prepare for the changes. However, there were conflicting and ambiguous views in the lead up to April 2020 with many questioning the strategies implemented by engagers.

Ten months have passed since the original date of the reforms, and the UK has faced the extraordinary challenge of the pandemic since. So, has your plan changed since April 2020? And, how have your business strategies changed in response to the pandemic?

With such considerable costs to the government associated with the pandemic, it seems reasonable to suspect that there will be a focus on all and any legislation relating to tax and tax avoidance.

Engagers and agencies that failed to observe reasonable care guidance or issued mass status determinations or blanket statements will need robust arguments to defend their actions should HMRC investigate. The consequences of not having appropriately prepared could be extremely costly.

Still time to reconsider?

Even though the clock is ticking, there is still time to review in preparation for the reforms.

With the additional pressures caused by the pandemic, engagers must ensure that they minimise their financial risk when the IR35 changes take effect.

Utilising contractors may prove key to completing critical projects, getting strategic objectives back on track or gaining competitive advantage. Those businesses that can demonstrate a fair and objective determination process will most likely stand the best chance of attracting the highest calibre contractors.

For those businesses that may have rushed a process through previously, or relied upon untested software models or off the shelf, vanilla solutions, there is still time to gain peace of mind and confidence that your IR35 plan is the right one for your business.

With the help of some expert guidance, it’s still possible to implement a robust and effective IR35 process that will offer the greatest chance of success with the smallest amount of risk.

Workr Compliance can support you with a quick and effective review of your contractor compliance and process.

With a genuine blend of people, process and technology, we can help develop a solution tailored to your industry requirements. We can help adapt an approach to your business strategies and objectives that is backed by comprehensive insurance and offers genuine and impartial collaboration with all parties in the supply chain.

Unlike Phileas, we’re not prepared to take the gamble.

For further help or advice please contact Andrew Webster, Director, Workr Compliance on 0208 10 60 000


Article by Andy Webster, Workr Compliance, Director


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Switching to an umbrella company can help you take control of your wellbeing

From talking to our contractors in recent months we know managing mental, physical and financial wellbeing throughout the COVID-19 pandemic has been a challenge.

Combine this with the upcoming reform to IR35 and it is no surprise that contractors currently offering their services through a limited company are worried about the potential impact to them and their families.

Many of our clients in this situation have already considered switching to become an umbrella company employee. This could be to better suit their own personal circumstances, a result of IR35 status determinations or agency or end-client stipulated contract requirements.

If you are currently considering your options we wanted to let you know there are numerous benefits to considering umbrella employment and in these uncertain times, they could be even more important to you.

Our service is personalised to your circumstances and focused to promote various areas of wellbeing to help you thrive and be at your best. These include support for your personal health, such as an always-available GP helpline, through to relieving the stress of financial worries by making you feel comfortable and in control of your own financial position.

Personal Health and Wellbeing  

  • 24/7 Private GP helpline, counseling service, prescriptions and mental health support for you and the family
  • Health assessments, specialist referral and access to non NHS health services
  • Online fitness, well-being and personal health classes
  •  £675 cash back per year for dental, optical and other qualifying treatments
  •  Discount gym membership
  •  Personal accident cover insurance

Financial Wellbeing

  • Compliant take-home pay backed by full employment rights including sick pay and maternity/paternity pay and option to roll up or retain holiday pay
  • One continuous employer for mortgage applications and credit
  • Flexible pension contributions via salary sacrifice
  • Access to daily payroll, advance facilities
  • Support with expenses opportunities
  • Professional Indemnity, Public and Employers Liability insurance

We constantly review these offerings to ensure a culture of contractor wellbeing is at the heart of everything we do. We believe this not only contributes towards keeping you healthy, productive, and achieving a positive work-life balance but also helps you engage with your agency, the end client, and our brand.

We understand that each and every umbrella employee is different and our account managers are committed to providing a bespoke service by getting to know you. Whilst our processes and technology help us do the work we do they will never replace these interpersonal relationships we enjoy. Just check out our Trust Pilot and Google Review scores for yourself.

If you are considering switching to umbrella, whatever your situation, we are here to discuss it and make it as easy as possible for you. Simply call us to discuss your needs with and one of our friendly and experienced team will do the rest.


Article by Gareth Murphy, Workr Umbrella, Head of Customer Experience


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Workr Group: Supporting flexible workers across assignments

Ian Standish-Leigh first used Workr Umbrella a few years ago, before moving onto another one of our services – Freelance Workr – when he set up his own limited company. Having just been offered a role under umbrella payment terms – and inside IR35 – Ian is now seeking the support of Workr Umbrella once more.

Here, we explore how Workr Group has been able to support Ian with a range of different services throughout his career…

 

Ian Standish-Leigh- Freelance Business Analyst

From umbrella…

As a contract business analyst in the public sector, Ian was on the lookout for an organisation that would be effective, supportive and offer good value. Dissatisfied with the percentage that some umbrella companies expected (as high as 50% in some instances), Ian continued his online research until he came across Workr Umbrella

Simple, straightforward and efficient. That’s how Ian has described the process from start to finish. Contractors using Workr Umbrella simply upload their hours onto a portal at the end of the week and the payment is authorised for the next week. 

Having been so pleased with the service that Workr had provided, when Ian made the next step in his career, he decided to take Workr with him. 

To freelance…

After setting up his own limited company, Ian found that external accountants weren’t providing the service that he expected. That’s when he decided to get back in touch with a company that he knew could do the job. 

As well as using Freelance Workr for accounting purposes, Ian cites their compliance as a huge benefit stating that for many in the public sector, adequate assessments aren’t a thing. And it’s  not just that. Ian says the ease of which he was able to contact Workr also further enhanced our service offering.

“I can’t fault the service. If I end up working as a contractor again, I will choose Workr – 100%. I’ve been so pleased with the service that Workr has provided that I’ve even referred a family member. I wouldn’t hesitate in recommending Nina and the team to anyone looking for either umbrella or freelance support.” Ian Standish-Leigh, Freelance Business Analyst.

Nina Lasota-Long, Practice Manager at Freelance Workr.

And back again?

Ian has recently been offered a new contract that falls inside IR35 and is looking to move back to Workr Umbrella. 

“We are delighted to be able to support our clients throughout their careers. We provide consistent service levels across our brands that are interchangeable meaning our clients can switch between them depending on their circumstances. Ian is a great success story of our flexible approach and how we partner with our clients – putting them first to help them achieve success!” Nina Lasota-Long, Practice Manager at Freelance Workr.

Whatever career path you’re taking, Workr Group are here to help with a suite of products that will propel you forward. Plus, if you’re currently working through a limited company and are unsure about the IR35 changes coming into effect in April 2021, we have a dedicated team to support with this. For more information drop us a message at info@workrgroup.com

COVID-19 Contractor and Freelancer Survey Update

Workr Group CEO, Matt Tyson – COVID-19 Contractor and Freelancer Survey Update

Workr during Coronavirus

  • Workr have been there for our customers throughout the Covid-19 pandemic paying out more than £1.2 million in salary’s since the scheme began offering protection to over 500 of our loyal contractors
  • Despite working from home and with a significantly reduced workforce we have maintained payment for over 3000 of our contractors
  • As the number one contractor solution of choice we boast the highest customer satisfaction ratings in the industry highlighted by our Trust Pilot Score of 4.8/5
  • Our umbrella clients continue to benefit from our cash health plan, health and wellbeing services, discounts, rewards on our dedicated Covid-19 online portal
  • We have continued to highlight the great work our contractors, partners and consultants do with our 20 acts of kindness

Refer-a-friend to Workr here!

The Results of our COVID-19 Contractor and Freelancer Survey

From hours being reduced to projects being cancelled, contractors and freelancers across the board have suffered due to uncertainty in 2020. And, even as lockdown begins to ease, many self-employed individuals are still facing financial hardship.

We decided to take stock of the thoughts and feelings of contractors and freelancers in our community to better understand what they’re going through and provide agencies with some relevant insight. Surveying almost 400 individuals from our database, below represents their circumstances and the effect that COVID-19 has had.

The impact of lockdown on contractors and freelancers

Almost immediately, lockdown had an impact on the availability of work. Of those we surveyed, 77% saw their industry take a hit.



Not only are self-employed individuals harder to identify – it’s also harder to quantify their earnings.

Support came eventually in the form of a grant that would pay 80% of typical earnings up to a cap of £2,500 a month. However, 56% of survey respondents believe the government could have done more. A further 28% felt the government had offered them nothing whatsoever.



When asked about their finances, approximately 40% said that while they were managing, they had serious concerns for the future. Worse still, 24% said they were really struggling with the financial impact of the pandemic.



How the contractor workforce adapted

Of course, a large number of contractors weren’t immediately laid off. In fact, 45% of those we spoke to were working from home. However, for 40% some or all of their contracts had been cancelled.



As a result, it should come as no surprise that 60% of those surveyed have found it more difficult to adjust than they had initially expected.



With that being said though, a combined 39% found the situation either easier than expected – or the same. While many believe there has been a lack of support, our data indicates that clients and contractors have somewhat pulled through.

On top of this, when asked whether or not they think their clients will explore more flexible working arrangements once lockdown is over, 50% said yes – with an additional 33% thinking it was possible.



What the future holds

With a large number of contractors revealing that the current lockdown and economic pressures haven’t harmed them too severely, it’s our opinion that there is cause to be optimistic about the future of contracting.

Yes, 40% of those surveyed believe that they are less likely to find work after the COVID-19 pandemic. However, a combined 57% believe that there will be the same opportunities – if not more.



In fact, of those who had a contract cancelled, over 83% are planning on getting straight back into contracting as soon as they are able to – still preferring it to regular employment.



The consensus of when that would be, or at least when lockdown would end, had the majority (37%) believing that it would be within 60 days. And with additional support being offered to the self-employed, we don’t think it will be long until business as usual.



How Workr can help

While we understand the pressure that contractors and self-employed people are currently facing, we believe that there is a light at the end of the tunnel. From the research we’ve undertaken, evidence suggests the drive for contract work will be even higher than before.

So, to help you seize the opportunities that drive will bring, Workr Group have a range of services to strengthen your agency.  From award-winning umbrella solutions to IR35 support, we can help put your organisation back on the right path while making you the first choice for contractors and freelancers around the country.

Sound good? Get in touch on 0208 10 60 000 or email info@workrgroup.com.