Kingsbridge has recently released its annual whitepaper, which has revealed some revealing statistics about the contractor market, and what this will look like as we move through 2023.
Almost 2,000 participants participated in the survey which covered a wide range of sectors and with a mix of responses from contractors, recruiters, and end clients*. The comprehensive survey was designed to give a complete set of data trends over the last year.
The results were overwhelmingly positive.
Below we summarise some of the key findings for contractors looking to utilise their limited companies in 2023.
Even with an uncertain political and economic climate throughout 2022, there was a clear improvement in confidence from end clients when using limited company contractors, with 83% of contractors currently working outside IR35. There has been an increase in outside IR35 positions available with end-hirers, with 77% saying that contractors are important for their business growth. 51% of recruiters also reported that they have seen end-clients change their stance from blanket inside determinations, to active limited company engagement outside of IR35 – a 30% improvement from the previous year.
The growing confidence in the contractor market is further reflected by contractors themselves, where 63% of contractors surveyed reported that it has been easier to find contracts outside IR35 over the past 12 months. Recruiters have also verified this statistic, stating that outside IR35 roles made up 58% of their advertised roles, which is a 40% increase from last year’s data, which found that only 41% of roles had been advertised as outside IR35. Clients are also in support of this, with 77% of end-clients acknowledging that contractors are ‘important to their business’ indicating that business growth outweighs the threat of a HMRC IR35 investigation.
So, what does 2023 look like for contracting?
Whilst 46% of contractors are either confident or very confident going into 2023 (up from 43% in the previous year), current market pressures cannot be ignored, with 52% of contractors saying they think outside IR35 contracts will be harder to find in 2023. Contractors are fearful that these pressures will lead to fewer hiring opportunities, with fewer Projects in the pipeline.
A recession can mean there is an increase in the need for a temporary workforce, and recruiters have noted that the contractor market is slowly growing. Last year, 78% of recruiters reported a decrease, 26% saw an increase and 2% said they saw no change in PSC engagement. This year, there has been a significant improvement in these figures this year, with 34% saying seeing an increase, 35% seeing a decrease and 31% saying there’s no change.
The Kingsbridge CEO, Paul Havenhand commented on how buoyant the market has been despite the challenges of the last year, ‘After yet another year of change; a rotating door of Prime Ministers, the on-and-off again tumult of the Off-Payroll reform, the Ukrainian conflict, and the passing of Her Majesty the Queen being amongst the most notable – we’re now navigating a cost-of-living crisis and a lingering threat of recession. Despite this, both anecdotally and in our data, we’ve seen good business continuity for limited company contractors who have once again weathered the storm and continue to provide their skills and services profitably and on their own terms, outside of the IR35 tax regime.’
The certainty in the off-payroll reform could be a reason for the growing confidence in the market, as clients, recruiters and contractors have become much more comfortable with the legislation and how to work compliantly with contractors.
Gerrard White is an established and reputable company specialising in IR35 compliance and expertly handling UK contracting work. With a proven track record, they excel in placing skilled contractors in various industries, ensuring both legal compliance and client satisfaction. If you would like a discussion about how our contingent workforce solutions can help mitigate your risks or manage your contractor community, email us or call us on 01892 553355!
* Survey response profile - 1,638 contractors, 216 recruiters and 80 end-clients
We'll be summarising more results from the survey in future blogs, but if you want to read the full survey download it here: Kingsbridge survey results