Contracting 2021: Outlook

Mark Read, Business Consultant at Husp, talks about his views on contracting in 2021.

So here we are almost a month into 2021, and like every new year this one brings with it new challenges, new objectives and most importantly, new possibilities. Looking back, I think it’s safe to say that no one could have correctly predicted how 2020 would play out, either in the contracting market, or the wider world. At Husp we went into 2020 knowing it would be a challenging year for both ourselves and our contractor population, since it was our first year of operations and the upcoming IR35 legislation changes were inbound.

IR35

We can expect more talk around IR35. The IR35 legislation changes are still inbound. The changes were originally planned to be implemented in April last year, however due to the pandemic, the government announced an IR35 delay. That means we are a year further down the line and the legislation changes are still looming over us. Many of us are already fully aware of the changes and what they mean for us individually, but for those that are unsure the changes mean that the responsibility for determining the IR35 status of contractors is moving from the contractor to the end client. This could mean that if you are a contractor working through a personal service company (PSC) you may have to switch to using an Umbrella company. And if you are an agency recruiting into an end client, your resource pool could dramatically change depending on whether contractors wish to continue working the way they always have. Until these changes are in full force it is difficult to predict exactly what the split of roles will look like, but as the year progresses, we will get a clearer picture.

Covid-19

We should also address the elephant in the room, COVID 19. The Coronavirus Pandemic has had a huge impact on all our lives and going forward the end doesn’t seem to quite be in sight yet. This means that many of the adaptions we had to make to our working lives last year will have to be carried over into this one. However, this year we can look at the effects of the pandemic on contracting with a little less fear and anticipation. This is because last year many end clients worked closely with recruitment agencies to deliver working from home solutions. This was something that, for many of the projects working through Husp, I had never experienced before, but is proof that there is resilience in the contracting market and that the pandemic is not enough to grind it to a halt. As the year progresses and the restrictions finally ease, I think we can expect the market to go from strength to strength in 2021. 

Brexit

Another factor that could affect all our lives this year, is the reality of Brexit. As of January last year, the United Kingdom had officially left the European Union, and as of New Year’s Day this year the transition period had come to an end. The final agreement has varying effects on individuals depending on their personal circumstances but for contractors, the impact is still uncertain. If you are an EU national living in the UK the ending of Freedom of Movement could play a vital part in your contracting future, be sure you have the correct rights to work in place moving forward. There could be some positives to Brexit however, as in the past we have seen that larger businesses will turn to contractors over full time employees in times of recession. Changes in employment rights could also see smaller businesses finding it easier to employ contractors.    

Contracting 2021

In summary, I feel that 2021 should be more predictable than 2020, and much of the impacts and growth that we were denied last year due to the pandemic, we can expect to see this year. Umbrella companies are going to play an important role in contractor’s lives this year as more and more workers will need to change the way they are paid. It is imperative that as a contractor, you find an Umbrella company that works well with you. Ultimately it is a service, but it is also a relationship that could last for many years to come. As a recruiter, it is important that you know who to recommend to your workers and who can guarantee them great service. If you have any questions surrounding the topics mentioned and how Husp can help you in 2021, please get in touch, my colleagues and I will be more than happy to advise you where we can.     

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