ATA Recruitment
IR35 Made Simple: What Engineering Employers Need to Know in 2025
Engineering Talent Shortages Are Pushing Employers Toward Contractors
If you’re finding it difficult to recruit permanent Engineers, you’re not alone. Across the UK, engineering and manufacturing businesses are facing critical skills shortages, from Design and Automation Specialists to Electrical, Mechanical, and Project Engineers.
As a result, many companies are turning to contract and interim solutionsto fill urgent gaps, meet project deadlines, and maintain productivity.
But for employers new to contract recruitment, or returning after a few years away there’s one major question:
How does IR35 affect us if we engage contractors?
IR35: What You Need to Know (Without the Jargon)
The IR35 off-payroll rules changed in April 2021 for the private sector. That means for the last 4 years, medium and large businesses like yours have had to determine the tax status of any contractor working through a limited company (also called a personal service company or PSC).
Here are the key points:
You Are Responsible
If your business meets two or more of the following:
£10.2M+ annual turnover
£5.1M+ on your balance sheet
More than 50 employees
...then you must assess IR35 status for each contractor engagement.
You Must Issue an SDS
A Status Determination Statement is a legal requirement. It outlines whether the contractor is “inside” or “outside” IR35, and why.
Take “Reasonable Care”
HMRC expects you to make fair, well-informed decisions. Blanket assessments or rushed calls put you at risk of tax liability and penalties.
IR35 Shouldn’t Stop You From Hiring Great Contractors
IR35 is manageable, with the right partner.
At ATA Recruitment we specialise in contract and interim recruitment for engineering and manufacturing businesses. If you're new to IR35 or unsure how to engage contractors correctly, we’re here to make the process smooth, compliant, and low-risk.
How We Help You Stay Compliant and Confident
We don’t just place contractors, we guide you through the full IR35 journey, including:
IR35 education and guidance tailored to your business
Assistance in producing compliant SDS documentation
Access to vetted, IR35-aware contractors
Use of umbrella company options, where appropriate
Advice on contract structure and working practices
And it doesn’t stop once the contractor starts.
Ongoing Contractor Aftercare = Long-Term Compliance
Our aftercare service ensures you stay compliant throughout the engagement, not just at the start. We’ll:
Regularly check in with both you and the contractor
Flag any changes that might affect IR35 status
Support renewal processes and extensions
Help you remain audit-ready for HMRC inspections
Solve Your Engineering Resourcing Challenge - Without IR35 Headaches
If you need skilled Engineers but can’t hire them permanently, contractors could be your best route forward.
Let us manage the recruitment and the compliance, so you can focus on results, not red tape.
Ready to explore contract solutions?
Book your free IR35 & Contractor Strategy Call today
Speak with our specialist team on 0116 216 7000 or complete the form below to get started.