UK Firms Hire Contractors Instead of Employees to Cut Tax Bills

UK businesses are turning to the self-employed in an effort to rein in costs as they try to navigate Chancellor of the Exchequer Rachel Reeves’ £26 billion ($34.5 billion) payroll tax hike.

Advertised contract jobs have risen 22% since April, when the tax rise came into effect alongside a near 7% increase in the minimum wage, according to Adzuna figures shared with Bloomberg. In contrast, vacancies for permanent jobs have declined 9%.

The findings show how firms are responding to Labour’s decision to increase social security contributions by shifting away from full-time staff toward contractors, who carry out ...