When hiring contractors, there are three main classifications to consider: Inside IR35, Outside IR35, and Statement of Work (SoW). Each of these categories has different implications for taxation, employment status, and contract structure. Here’s an explanation of each:
Inside IR35
- Contractors who fall inside IR35 are considered employees for tax purposes.
- They are subject to the same tax and National Insurance contributions as regular employees.
- Contractors will need to use an umbrella company for inside IR35 contracts, who will deduct these taxes.
Outside IR35
- Contractors who fall outside IR35 are considered self-employed.
- They manage their own taxes and National Insurance contributions via their own limited company.
- They have supervision, direction control over their own work.
Statement of Work (SoW)
- Contractors work under a specific Statement of Work agreement.
- The SoW outlines the deliverables, scope, timelines, and payment terms.
- This model is more focused on project-based work rather than ongoing services.
A well-crafted SOW model in the recruitment industry helps establish clear expectations, mitigates potential disputes, and ensures that both the client and the recruitment agency are aligned in their efforts to fill job openings efficiently and effectively. It serves as a crucial document for formalising the recruitment project’s details and terms.
If you’d like to learn more about InfoSec People’s Statement of Work, get in touch with us:
info@infosecpeople.co.uk | 01242 507 100
InfoSec People is a boutique cyber security and IT recruitment consultancy, built by genuine experts. We were founded with one goal in mind: to inspire people to find the careers that inspire them. With the success of companies fundamentally driven by the quality of their people, acquiring and retaining talent has never been more important. We believe that recruitment, executed effectively, elevates and enables your business to prosper.
We also understand that cyber and information security recruitment can genuinely change people’s lives, that’s why we take the duty of care to those we represent very seriously. All our actions are underpinned by our core values:
- Always do the right thing
- Be the best we can be
- Add value
We work with businesses in the cyber/tech arena, from start-ups and scale-ups to FTSE100 and central Government, many of whom are always looking for great people.
Call us directly on 01242 507 100 to discuss opportunities or email info@infosecpeople.co.uk.