Why not sole trader?

“I’ve cracked it. We get around this limited company IR35 thing, and just make ‘em all sole traders!”

- No wise recruitment director. Ever.

Tap the brakes there, Gary. That celebratory pint will have to wait.

With the off-payroll rules coming in the private sector (AKA: IR35) we’re seeing all sorts of responses. Most agencies are doing the right thing and partnering with trusted suppliers to help manage the change.

On occasion though we’re getting enquiries about whether going the sole trader route is an option. The answer is a definite no. The reason behind this is the ITEPA (2003) regs, sections 44-47, which tell us:

“all remuneration receivable under or in consequence of the agency contract (including remuneration which the client pays or provides in relation to the services) is to be treated for income tax purposes as earnings from that employment.”

It’s been a while since these rules were dusted off here @ granite towers, but they very much do still apply. Overall, the new regs are drafted in such a way as to dovetail with all these old ones, and create a very broad net that can’t be circumvented (well, at least not legally).

Our range of tools, from whitepapers to contractor assessments is helping agencies pragmatically and proactively manage this change. We’ve drafted comms to help you explain this to both your candidates and clients… And our decades of experience around IR35 has helped us to express it all in a way that’s sensitive and shows the benefits, not just the downside. Even the most critical of contractors can see the light, if given the granite info.

So, wise recruitment director… If you’re ready for happy candidates, happy clients and a smooth April transition while keeping your margin intact, you know what to do.