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Significant rise in the number of contractors choosing the umbrella company route

 

The number of enquiries for umbrella companies has more than doubled compared to just a few months ago, with the recent changes to employment status checks thought to be the reason behind this surge.

The findings, from Parasol Group have revealed that enquiries have increased by an incredible 76% since Q1 2017 – going from 4,473 to 7,916.

It is believed that IR35 changes with regards to the public sector is one of the main factors contributing to this surge in umbrella company interest, with many contractors choosing to switch to the umbrella during the lead up to the changes.

Nick Rawlings, Group Commercial Director of Parasol Group commented on the latest findings, “We were prepared for an uptick in enquiries but the sheer volume has been surprising. Rather than using HMRC’s online employment status checker as a precision tool, many public sector bodies have used it as a blunt instrument.”

“From the conversations we have had with contractors, it is clear that a large proportion of new enquiries are legitimately in business of their own account and are therefore outside IR35. By considering all contractors to be inside IR35 many public sector end users are throwing the baby out with the bathwater.”

 


Daniele Cantello is an Employee Liaison Officer for ContractorUmbrella Ltd, one of the UK’s Most Respected Umbrella Companies. Learn more about Daniele on Google.


 

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