Impact of IR35 on Interim Contract Rates: Key Insights
IR35 legislation changes have impacted interim contracts in the food manufacturing and logistics sectors…
Especially affecting roles under Supervision, Direction, and Control, such as Interim Shift Managers. Since the legislative shift, approximately 20% of our interim assignments now fall inside IR35. Larger food manufacturers often take a more risk-averse approach, classifying the majority of their contracts within IR35.
However, not all interim managers are open to inside IR35 roles due to tax implications. To better understand this, we recently conducted a survey with our interim managers, focusing on their willingness to accept inside IR35 assignments and the effect on their required day rate.
Summary of the IR35 Survey Results
Q1: Would you accept inside IR35 assignments?
- Yes: 33%
- Would Consider: 23%
- No: 44%
Q2: What would be the impact on your day rate?
- Average increase in day rate: 36%
Breakdown of Rate Increases:
- No increase: 3 interims
- 10% to 25% increase: 9 interims
- 30% to 36% increase: 7 interims
- 40% to 56% increase: 5 interims
- 60% to 70% increase: 4 interims
- 100% increase: 2 interims
Sample Size: 88
Key Takeaways
Many interim managers are open to inside IR35 assignments, though they require higher day rates, making it more costly for clients. Additionally, clients face added employer costs, such as Employer’s National Insurance (currently 15%).
It’s worth noting that many assignments currently classified as inside IR35 could potentially be outside IR35 according to the Government’s CEST tool, offering a more cost-effective solution.
If you’re interested in learning how we can support your IR35 compliance while managing costs, please get in touch.
