The number of solo self-employed in the UK (excluding those who have others working for them) was 4.4 million in 2020.1 This is a slight drop on the previous year, but the freelance community now represents 36% of the global workforce2 as more people seek more autonomy and flexibility in their work. 75% of freelancers3 say they wouldn’t trade their jobs for other kinds of work.
The demand for those self-employed contract workers is undoubtedly there as more people work from home post-COVID. 67% of business managers4 say they use freelancers to bring in new skills, and 42%4 admit that bringing in temporary staff gets the work done quicker.
As a result, the relationship between the worker, the hirer and the recruiter has changed. The UK’s IR355 tax avoidance legislation has recently been expanded to include limited companies in the private sector. As limited companies are often the business structure choice of the self-employed or freelance professional, hirers now risk paying more tax or National Insurance for using contractors off-payroll. This means recruiters are becoming conduits between these self-employed freelancers and the client. It changes the dynamic and has led to the rise in popularity of the Statement of Work.
A Statement of Work outlines all the detail of a temporary contract or project - the brief, the timings, the budget, the payment terms and the personnel involved.
In signing one to secure a client, recruiters may be opening themselves up to new risks, so it’s essential to be aware of what’s involved:
This all requires more time, creates more work, more risk, and more insurance and administration costs.
Recruiters should not see a Statement of Work as a quick-win that gains them a client for little extra effort. It’s potentially a completely different way of working. Therefore, it’s vital to thoroughly review all details and responsibilities, ensuring you are compensated for your additional time and protected against any new risks.
Sources:
1. ipse.co.uk/the-self-employed-landscape-report-2020
2. thimble.com/freelance-statistics-2021
3. forbes.com/a-bright-future-for-small-business-freelancers
4. hrmagazine.co.uk/freelance-workers-could-answer-flexible-workforce-demand
5. gov.uk/understanding-off-payroll-working-ir35
6. gov.uk/check-employment-status-for-tax
7. gov.uk/section-3-off-payroll-and-disguised-remuneration