The introduction of HMRC’s off-payroll reform has impacted the public sector over the past 6 months and we have witnessed a dramatic increase in enquiries for our PAYE payroll solutions; as contractors make the switch from their limited companies to compliant umbrella solutions in line with their updated IR35 status.
Cloud9 has supported many contractors and recruitment agencies during this transitional period and with such a vast growth in contractors registering with our services; we were intrigued to find out how our clients viewed these changes as well as to how it was handled by those involved.
82% of the recruitment agencies we work with place contractors within the public sector, over a large variety of industries with IT, Medical and Education being the most common fields.
It appears that all agencies endeavoured to “prep candidates thoroughly with relevant information” however many found that many contractors still queried the changes after 6th April. One recruiter commented that “some clients did not get us the in/out [IR35] decision until very close to the deadline” which was echoed by other comments and highlighted the pressure in which both agency and End Client would have felt to ensure that the correct IR35 status was declared. 46% of Cloud9 contractors managed to get a straightforward confirmation of their IR35 status from their agency.
However, 55% of recruiters’ state that they saw an increase in contractors refusing to accept public sector roles. Speaking to our contractors, 33% are considering other employment opportunities and 27% are still unsure as to whether they will remain working for the public sector. We asked the contractors whether they could negotiate a pay rate increase due to the change in their take home, however only 27% found that this was possible. There was a lot of reliance on the HMRC Employment tool and although a blanket approach has been seen throughout the majority of the Public Sector, recruiters found the sudden change to the industry an incredibly stressful experience.
Cloud9 could offer support and guidance during the pressurized timeframe recruiters had to face. 80% of Cloud9 contractors found the information we provided during this period to be more clear, concise and insightful around the legislation changes than that received from other parties. Recruiters knew that “candidates do not need to worry if they use an umbrella” and a 100% of our agencies thought Cloud9 went above and beyond average service during the transition period.
Contractors who previously worked through their own limited companies found the switch “seamless”, “quick and easy” with “no troubles at all”. Even those who were reluctant to move thought “Cloud9 have been excellent”. We asked for the reason as to why contractors decided to go through Cloud9 and not paid through the agency, with many quoting that their agency doesn’t offer PAYE directly. For contractors, it was prevalent that the use of a professional independent party gave them the reassurance and flexibility required for their various assignments. Recruiters, on the other hand, have a firm focus on ensuring that their preferred providers were compliant. Our affiliations with APSCo and Professional Passport ensure we adhere to all recent legislation and our compliance team worked around the clock to complete hundreds of due diligences forms for new and existing agencies during this period!
The feedback and responses from all those involved in our survey has been tremendous and 97% of those who took part will recommend Cloud9 to friends, colleagues and candidates. If you would like to find out more on how Cloud9 can support you, then please get in touch on 0207 078 0212.
For contractors who still operate their own limited companies, and wish for advice regarding their options within the Public Sector – then get in touch with K&B Accountancy Group on 0207 078 0211 and we can arrange for a consultation with one of our accountants.