It’s believed that there are over 1.75 million contractors working in the UK. There are certainly plenty of benefits to using contractors: not only does it offer you a flexible workforce that you can scale up and down depending on exactly what your commercial requirements might be, but it’s also the case that contracting can save you money. This article will explore exactly what the situation is with contractors, and what it might mean for you to use them.
Saved cash
The first, and perhaps most important, aspect of contractor use is the way that it lets you save cash. Contractors pay their own income taxes – or, if they operate through their own limited company rather than a contractor services firm, corporation tax. They’re also responsible for everything from holiday pay to sick pay, so from the perspective of a business leader looking to address some problems with the balance sheet, it’s well worth using them.
Flexibility is the name of the game
Another key benefit of using contractors to staff your workforce is that they are far more flexible than their fixed-term counterparts. It’s possible to determine in advance how long the contract will last for, and there is very little risk of letting it expire naturally. While you can also give staff members a notice period, it’s not always as easy to get rid of them as you may have to factor in the risk of unfair dismissal, redundancy claims, and so on.
Better for them
Many contractors find that the level of flexibility it offers them is second to none, and indeed far better than any level of flexibility they might receive in the workplace. If a contractor wants to schedule in a holiday, for example, they can do so in between contracts without having to ask for permission from an employer. This, in turn, can lead to higher morale – which is great for your firm.
A word of warning
While contractors can certainly benefit your business in a number of ways, it’s worth pointing out that the use of them can also cause issues further down the line. Recent legislation known as IR35 has been brought into force in the UK, and it means that anyone who is contracting in the public sector (and, soon, the private sector) just for the tax benefits will face a crackdown. If you end up hiring what are known as “disguised workers”, you could be in line for all sorts of legal problems – so ensure that your contractors use a reputable, compliant firm to manage their affairs.
Contracting is becoming ever-more popular as a route for employers to use when they want to resource their businesses, and it’s easy to see why. With flexibility, saved cash and more all on offer, there are lots of benefits to going down this road. And provided your contractors use reputable organisations that understand the importance of IR35, there’s no reason to suspect that there will be any legal hassle either.
