Is IR35 driving costly knee jerk reactions?

March 4, 2021

Categorised in: Laws & Regulations, News, Payroll, Recruitment

IR35 hits in April.

So, it’s no surprise that panic, speculation and conflicting advice are prevailing about how best to prepare. We’re alarmed and shocked to see the misinformed and penal instructions about IR35 emanating from some of our recruitment agency clients’ end clients.

Whilst we all need to accept the one inevitability – there is more tax to pay – some tactics being invoked are questionable. These are leaving recruiters not just with tax rises, but also increased costs to their businesses and potential pay cuts for workers!

Recruiters are being left with 3 questions on IR35:

  1. Return to in house payrolls? As an example: a 400-man payroll will cost over £30k per annum to administer.
  2. Ask the workers to take a pay cut? Forcing workers to work through any umbrella company means two things. Not only will they pay more tax, but they will also be charged for the privilege, with a typical charge being £20 per week. That’s effectively over £1,000 per year (on an average £18k salary that’s a 5.6% pay cut!)
  3. Do I dare to be different?

Free Contract vs. PAYE Calculator

Be prepared for IR35. Sign up for our easy to use pay calculator and find out the true cost of running a contract payroll vs PAYE.

The results may surprise you!

Look at the evidence when it comes to IR35

Fact: Workers are actually better off financially being paid via a PAYE model.

For IR35, we need to look at more than just 'pay rate’ and include the real picture when it comes to take-home pay. Simply deduct the weekly fee and all costs of employment going through an umbrella and you see the real ‘take-home pay’ for your workers. You’ll have to ask if the vanity of a higher umbrella rate is stopping your workers from moving to a PAYE Payroll Solution.

We all know that it's not really a higher pay rate that's offered by umbrella companies, whilst PAYE is considered ‘the IR35 safe solution’.

Is it vanity or is it a lack of awareness?

Evaluate the true costs of IR35 – and value of workers’ pay

Hive360 have created a calculator that converts contract rates to a PAYE rate for immediate comparison. We hope to bust a few myths and deliver some very surprising outcomes, both in terms of worker take-home pay and agency costs.


Now is the time to face the reality.

Hive360 only payrolls staff under standard PAYE rules, with the added bonus of a Welfare and Benefits system at no cost to the worker. Your workers benefit from more and your Company Gains an IR35 secure, robust and commercially sound solution.