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Contractors: Are You Considering A Move Back To Permanent?

Contractors: Are You Considering A Move Back To Permanent?

As we mentioned in a recent blog, a third of contractors surveyed said they would move back to permanent employment if the recent IR35 reforms were extended to the private sector.


All ways of working have their downsides and on top of poorly conceived legislation, some contractors worry about unpredictable workflow and income. However, for most contractors, any disadvantages are far outweighed by the enviable benefits of freelance life.

But undoubtedly the recent IR35 legislation changes are causing some contractors to consider making the switch. Since its introduction in April, thousands of public sector contractors operating via a limited company have been effectively taxed as employees (since their clients are now responsible for determining their IR35 status) while enjoying none of the benefits of permanent employment. No sick pay, no pension entitlements, just a higher rate of tax. As such, many of these contractors are considering their options, including permanent roles and their associated perks.


It’s not all doom and gloom, though. The recent reforms to IR35 don’t affect the private sector – at least not yet – and there are plenty of public sector contractors who have found ways to operate so that they are not affected by the reforms – including switching to using an umbrella company, for instance.

Furthermore, the benefits that come with permanent employment can be replicated to a certain degree as a contractor, albeit it at your own cost. You can pay into a private pension and insure yourself against long-term illness. And those of you who need it are still eligible for statutory maternity or paternity pay.


But perhaps the most important fact to remember if you are considering moving to a permanent role is the reason why you decided to go it alone in the first place. Although now a major aspect to keep in mind and consider with every new contract you take on, IR35 (and its ongoing amendments and implications) shouldn’t be what determines your working preferences or lifestyle choices. Fundamentally, the core benefits of contracting, whether for the public or private sector, still remain. Meaning for many independent minded professionals, contracting can still be a far more attractive prospect than a 9-5 in-house gig.

You’re still in control of your own time – you can go for that extra long morning run or attend your child’s afternoon nativity play. Your growth and development is entirely in your hands, and the breadth of experience you gain working with different clients is far greater than if you were employed by just one. And your earning potential isn’t capped by a salary either – if you can fit it in, you can invoice for it.


If you’ve reached a moment of ‘stick or twist’ in your contracting career, we think there are plenty of reasons to stay right where you are.


If you are concerned about the reforms to IR35, you can download our in-depth guide here, which provides a full explanation of what the legislation means for you and guidance to ensure you’re not affected unnecessarily.

Because many contractors are responding to the reforms by switching from working via a limited company to using an umbrella company – where IR35 doesn’t apply – we’re also compiling an in-depth guide to the pros and cons of making this switch and the process involved.


Do check back for this guide in the coming weeks and if you have any queries in the meantime, please don’t hesitate to get in touch with us.


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