Freelancers opting out of agency regs

According to a survey of more than 3,500 of its contractors by giant group plc, the contractor specialist, 97 per cent have opted-out of the Employment Agency Regulations.

The Employment Agencies Act sets out agencies’ responsibilities and obligations to freelancers. These include providing details of the work contractors are required to do prior to engagement and ensuring suitable accommodation is available when contractors are required to work away from home.

Matthew Brown, Managing Director, of giant group comments: "Most of giant’s contractors seem to think that these regulations are entirely inappropriate to their situation.

"They believe that remaining inside the regulations provides contractors with no real benefits, and that not opting out may actually put them at a competitive disadvantage.

"The vast majority of our contractors have made the choice for themselves in the interests of their business."

Insurers

Giant also claimed that some insurers are refusing to provide IR35 cover to contractors that do not opt-out of the new Agency Regulations warns giant.

According to giant, some insurers believe that the Inland Revenue could take the view that the regulations impose a degree of control over contractors that suggest an employer-employee relationship.

Matthew Brown said: "The regulations treat contractors more like temps than independent businesses. Insurers’ concern is that if contractors chose not to opt-out their status of being in business on their account may be open to attack by the Revenue.

"Some insurers are saying they don’t want to provide IR35 cover if the risk of the Revenue successfully challenging contractors’ employment status is that much greater.

"Whether these regulations will prove a factor in future IR35 cases remains to be seen."