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Contracting in the Insurance Market – A New World

With 2020 over and a glimmer of hope on the horizon, borders closed to keep Covid out of business, and with the vaccine plan steaming ahead, we are also in the home stretch of IR35 reforms coming into law post April 2021. Are companies ready? And by that I do not mean taking the blanket approach as that would be breaking the law!

Many of us do not like change but unfortunately, we must go through it, to come out the other end, better and wiser. I have witnessed the challenges the interim market is facing and the consequences if the insurance market fails to get their interim recruitment plan in place.

Firstly, companies need to understand the way in which an interim worker is now expected to work or be paid has completely changed. With a record number of permanent roles in the insurance market and lack of interest from contractors to fill the gaps, how will companies continue to retain and attract interim resources?  I want to share some helpful tips to keep your company competitive.


My advice

Planning is key, think about:

What gaps will need filling? What projects will need additional resource? What projects will begin? Who is a flight risk or is there a maternity/paternity cover on the horizon? Will an interim worker be required to fill these gaps?

A company’s first point of call will be to make a SDS, (Status Determination Statement) by using an SDS tool:


-Or any other reputable independent SDS tool.


The output of the above will then allow you to determine which avenue to go down:

-PAYE option (Inside IR35)

-PSC (Ltd) option (Outside IR35)

-FTC – Fixed term contractor option


If the SDS is deemed Outside IR35, congratulations! Both client and PSC are happy, why?

-Companies will save money by not having to increase the rate to compensate for the extra taxes.

-They continue to attract PSC on an interim basis, because they can continue to work through their Ltd company as normal.

-A bit more compliance is needed from the client to make sure everyone in the recruitment chain is engaged for complete transparency as the risk moves along the chain.

-If HMRC ever investigated the contract their first point of call would be to the “fee payer”



If the SDS is deemed Inside IR35, the client has two options.

-PAYE (Inside IR35)



Both options need a rate or salary re-evaluation to attract candidates, why?


1st option – PAYE

-To attract interim contractors on PAYE basis, clients will have to compensate for the extra charges. Unfortunately, ‘the rate’, pre IR35 reforms must be revised as these rates are no longer valid in a PAYE environment.

-Contract change from Ltd to PAYE = Change in day rate to PAYE day rate

-Insurance companies which have been successful attracting PAYE contractors have at least covered (as a minimum) the Employers NI c13.8%. However, some have gone beyond this percentage to make sure they continue to attract and remain competitive and not lose their valuable experienced workers to competition.

-Umbrella companies will be used to pay the contractor as they will deduct the relevant taxes and give the worker their NET amount.


2nd option – FTC

-Companies need to appreciate FTCs are not the same as permanent employees. Why? Because they are not entitled to the same benefits (or have reduced benefits) not to mention lack of job security. Then why should FTCs pay the same tax as a perm employee.

-Companies who continue to offer the same FTC salaries as they would a permanent employee are losing to those who are compensating and incentivising for the loss. To attract candidates on FTC, companies need to make allowances for this to mitigate their loss.

-Your competitors who are successfully attracting FTC are those which are uplifting salary anywhere between 20% – 40%. This is based on a few factors, such as bonus, pension, benefits, to incentivise potential candidates from the interim and permanent pool.


To conclude my message to companies is, one method does not fit all. Remain agile and flexible and take a few minutes extra to think about how best to attract your next interim resource. As it will save you time and money in the long run. Interim resources are there to help ease the workload, deliver projects and ultimately meet deadlines.

I am an Affiliate of the IFoA. Having worked in the actuarial market since 2004, I’ve accumulated a vast network and hold a wealth of knowledge in the interim recruitment space.

Having built two successful insurance interim functions for previous businesses, I now work at Arthur Financial, who have a large footprint with all major Insurance businesses. I’m able to not just to recruit, but utilise my level of experience, knowledge and network in finding solutions for clients to help them to stay ahead of the change.


By Rupa Pithiya

To get in touch with Rupa give her a call on 0203 5877 464 or email


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