Contractor sector ‘pleasantly surprised’ by sudden rise in Outside IR35 determinations

Ongoing warnings to engagers about the of banning limited company contractors, or blanketing them ‘Inside IR35’, seems to be taking affect.

Reports are coming in of major employers amending and making Outside IR35 determinations, ahead of the implementation of the Off-Payroll rules in the private sector next month.

Contractor UK has revealed that at least 11 end clients have been identified in the last few days as offering either a ‘fair’ determination process or one geared towards ‘Outside’ outcomes.

It has also been revealed that many end users are even asking for existing CEST determinations to be reviewed, resulting in the overturning of pre-existing blanket determinations or contractor bans.

The reports come amid a fresh warning from law firms that end users may not even have the legal grounds to force contractors onto PAYE.

Legal firm Chartergates recently revealed in a briefing to end users that “blanket [decisions]…will not constitute a valid Status Determination Statement (SDS) for IR35 purposes, as they are non-specific, not provided directly to the worker, and will probably lack reasons and due care in approach.

“This in turn means that they do not provide the engager of a PSC with a statutory right to deduct PAYE taxes from the PSC.”

A growing number of recruitment agencies also seem to be on board with changes to Status Determination Statements, with Contractor UK reporting that at least one recruiter thought that the industry had turned a corner.

Speaking in the publication the agent, a specialist in the digital sector, said: “Yesterday was the first time I’ve been able to advertise an ‘Outside IR35’ contract in many, many months. I’ve been inundated with fantastic contractors as a result, most of whom refuse to work Inside IR35.”

This highlights that many recruiters and end users recognise the dangers of losing talented contractors to competitors offering ‘Outside IR35’ contracts.

“Blanket banning PSCs denies you -- the end user -- essential business talent,” says Freelancer & Contractor Services Association CEO Phil Pluck.

“The IR35 reforms are coming into place on April 6th. [And unfortunately for the unprepared] HMRC cannot make the decision to delay or cancel the reforms.”

If you are still yet to receive an SDS from an agency or end user or you have queries about any SDS given to you already, we are here to help.

We appreciate the stress and strain that IR35 has had on contractors, so we just want you to know you can talk to us.

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