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Contractor hiring continues to rise, but regional lockdowns may stifle progress

How will the second COVID-19 wave affect Contractors?

When the UK entered lockdown in March, the latest Qdos research suggests as many as 46% of contractors had their projects either placed on hold or terminated early. As a result of a stagnant hiring climate, income dried up. And with limited to no support from the Government in the months that have followed, it’s fair to say the pandemic has hit limited company contractors particularly hard.

In fact, around 1 in 3 self-employed people, including millions of sole directors of limited companies and the newly self-employed have been allowed to fall between the cracks of the Government support schemes. And if you’re one of those excluded, going more than 6 months without much - if any income - will have been incredibly challenging. 

But it’s not all doom and gloom. As more parts of the economy reopened during September, contractor hiring rose sharply, according to the latest Report on Jobs by KPMG and the Recruitment and Employment Confederation (REC), of which Qdos has recently become an exclusive IR35 partner.

The report shows that after some of the worst performing months on record during the lockdown earlier this year, hiring for temporary roles rose at a steeper rate last month – the quickest rate since the end of 2018. As expected, the data suggests that much of the upturn is widely linked to projects recommencing following the easing of the initial lockdown measures.

Not out of the woods yet

The placement of temporary workers has steadily increased across the private sector in recent months, but rose for the first time in six months in the public sector in September.

However, despite the steady rise in temporary work, contractor rates have continued to fall. Much of this is down to the budgets being squeezed and a reluctance among firms to spend money due to the economic uncertainty the pandemic has created.

In terms of regions with the most increase in work for contractors, the Report on Jobs shows it was the midlands that recorded the fastest rise, followed by the north of England. London, surprisingly, was the only monitored region in England, which saw a slight decline during September.

While the rise of opportunities for contractors is promising, the economic landscape is shifting quickly, so be warned, things may change. 

‘Challenging times ahead’ for Government

The second wave of the pandemic is well and truly underway, with more and more regions in the UK facing tighter restrictions. Due to this, businesses could tighten their belts, which could mean projects and work may be put on hold once more.

James Stewart, Vice Chair at KPMG, said: “With increasing unease over what will happen in the coming months with the pandemic, Brexit and with the end of the furlough scheme in sight, the uncertainty for UK business is not going to dissipate anytime soon.

“The Government has got challenging times ahead to continue to offer adequate support to business, opportunities for job seekers to upskill while helping instil confidence in the UK workforce.”

With over 25 years’ experience, Qdos Contractor is an IR35 specialist that has handled over 1,600 IR35 enquiries and helped contractors save over £35million in tax. For more information regarding your IR35 status and to hear how we can help ensure your compliance, please contact us on 0116 269 0999 or email [email protected]

By:Benedict Smith

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