What is IR35?

21 February 2023
2 minutes
Share

Colleagues discussing contractor hiring around a table

IR35 decides whether a contract is employment for tax purposes. This guide walks through what the rules ask, who answers for the determination, and what changes for an intermediary once the chain is in scope.

Key areas we will cover

Diversifying your contractor talent pool for resilience
Mastering international and cross-sector sourcing
Leveraging PEO and umbrella solutions for cost efficiency and compliance international and cross-sector sourcing
Implementing advanced IR35 and tax strategies post-reform
Building long-term contractor relationships for sustained growth

Introduction

Scaling contractor hiring in the UK in 2026 requires strategic foresight to navigate IR35 offsets, forthcoming PAYE supply chain rules, and a competitive talent market. For recruitment agencies, end clients, and growing businesses in construction, energy, IT, engineering, and beyond, advanced approaches like portfolio diversification, global sourcing, and partnering with specialist providers deliver scalability, reduced risk, and superior outcomes. This guide explores proven strategies to optimise contractor engagement, ensure IR35 compliance, and drive long-term success while highlighting how Promultis’s PEO and umbrella solutions make it seamless.

Book a Free Consultation!

Diversifying your contractor talent pool for resilience

Over-reliance on a narrow pool or single sector exposes businesses to project delays, skill shortages, and economic shifts. Diversification builds a robust, adaptable workforce.

Spread across sectors: Balance hires from construction, renewables, tech, and energy to hedge against downturns in any one area.
Mix contract lengths and types: Combine short-term specialists with longer engagements for stability.
Leveraging PEO and umbrella solutions for cost efficiency and compliance international and cross-sector sourcing
Incorporate international talent: Tap skilled workers from global markets, using compliant models to handle UK payroll without entity setup.
Regular supplier reviews: Assess contractor performance and availability quarterly to refine your pool.

These steps create agility, ensuring consistent delivery even in volatile conditions.

Talk to us about what is IR35

Daniel Okafor

leads contractor payroll operations at Promultis

Daniel Okafor runs the payroll operation that pays several thousand contractors every week, and he built most of it. He joined Promultis from a large umbrella provider, where he was responsible for RTI submissions and auto-enrolment across a book of forty agencies. Daniel works closely with recruitment partners on onboarding, same-day payments and the reporting hirers need for their own audits. He writes about the practical side of contractor engagement — the parts that decide whether a worker stays past their first assignment.