Our website uses cookies to store information on your computer. You may delete and block all cookies from this site, but parts of the site will not work as a result. Find out more about how we use cookies.
(Accept cookies and do not show this message again)
Shout99 - News matters for freelancers
Search Shout99 - News matters for freelancers
(Advanced Search)
   Join Shout99  About Shout99   Sitemap   Contact Shout99 23rd Jun 2021
Forgot your password?
Shout99 - Freelancers, FO35, Section 660
New Users Click Here
Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660
Front Page
Freelancers' Shop...
Ask an Expert...
Direct Contracts
Press Links
Question Time
The Clubhouse
Conference Hall...
News from Partners


Business Links

Shout99 - Freelancers, FO35, Section 660

Freelancers' Shop

Personal Financial Services
from ContractorFinancials




Income protection

... and more special offers for Shout99 readers in the Freelancers' Shop

Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660

News for the
Construction Industry

Hardhatter.com - News for small businesses in the construction industry

Powered by
Powered by Novacaster

More private sector giants shun contractors over IR35 reforms
by Susie Hughes at 14:29 01/10/19 (News on IR35)
Reports suggest that financial giant, Barclays, has told its line managers that as a direct consequence of the private sector IR35 changes set for April 2020, they ‘will no longer engage contractors who provide their services via a personal services company, limited company, or other intermediary.’
The email goes on to specify that ‘Barclays will engage contractors on a PAYE basis only for new or renewed contracts’ and they will not be extending any existing contracts from now and will only offer PAYE contracts as of January 1 2020.

Others in the financial sector have already adopted similar cautionary approaches including HSBC, Morgan Stanley, and M&G Investments, and there are reports that the same blanket decision is set to be applied to contractors within pharma group, GlaxoSmithKline.

Blanket determinations
A GSK contractor approached contractor tax specialists, Larsen Howie, with news that GSK are going the same way as Barclaycard with renewals cut off after March 31, 2020.

This comes after the mass HMRC IR35 'nudge' letters sent out late August targeting approximately 1,500 GSK contractors. These letters asked contractors currently engaged by GSK to check their IR35 employment status and to subsequently prove that they’re genuinely self-employed. (See also: HMRC accuses 1,500 GSK contractors of IR35 offences - Aug 2019)

It would seem that GSK has made the ‘safe’ decision to push all of their current contractors to PAYE, thus putting themselves out of reach of IR35 - regardless of what the results of the letters are and with no apparent effort made to review each contractor’s case individually.

Barclays -‘short-sighted attitude’
Andy Vessey from Larsen Howie has spoken out before on why blanket decisions are not just bad for contractors, but why ruling out a flexible, specialised workforce is also a bad business move for the companies that use them.

Mr Vessey said: “This is a most short-sighted, disappointing, and lazy attitude to take. It is similar, however, to HSBC’s response to the IR35 reforms that were publicised a few months ago, and which were ultimately found to be half-truths. HSBC’s original communique was badly worded and one they had to retract.

“It may be that Barclays, similar to HSBC, will be outsourcing specific work/projects to Managed Service Providers (MSPs) - in which case, contractors would still be able to operate via their PSCs.

"All Barclays would be doing would be shifting the IR35 burden to either the MSP, if it falls within the definition of a medium-large sized company, or the contractor themselves as is the case right now.”

GSK - group action
In replying to the GSK contractor, for whom Larsen Howie has written a response to HMRC’s IR35 enquiry letter, Andy Vessey takes a closer look at GSK’s reported blanket off-payroll approach.

He wrote: "I think, in the first instance, you need to ascertain if GSK is going to insist that MSPs only engage contractors on a PAYE basis.
"However, I can’t see that they have authority to do this as they are simply absolving themselves of their responsibilities.

"If GSK is going to force contractors on to the books in one way or another then contractors will need to form themselves into action groups to resist this, with the threat of withdrawing their skills and expertise if they refuse to listen.

"There is strength in numbers and unity. Maximum publicity should be given to GSK’s negative approach."

No longer using contractors
HMRC still blind to impact of IR35 on the private sector
As has been predicted for some time by those campaigning against the IR35 clampdown in the private sector, medium to large companies are deciding to simply stop using limited company contractors.

Larsen Howie said that this could be due to the ambiguity of IR35 and the associated risks of a wrong employment status determination, or it could be down to laziness when it comes to reviewing each contractor’s contract and working practices individually.

Either way, these predictions continue to go unheeded by HMRC. While blanket IR35 decisions, including pushing all contractors to PAYE, are certainly the most direct and risk-averse route to removing any IR35 concerns, it’s been criticised by many as a short-sighted business move.

HSBC’s decision – who was arguably the first to opt for an unabashed blanket approach – was aptly described as ‘using a sledgehammer to crack a nut’. This kneejerk reaction to the impending IR35 reform appears to be spreading across the private sector, despite the pros of using contractors as part of a larger workforce still far outweighing the cons.

Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.

If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2019

View Comments (Threaded Mode) Printer Version

Mail this to a friend
More private sector giants shun contractors over IR35 reforms Susie Hughes - 14:29 01/10/19
Re: More private sector giants shun contractors over IR35 reforms drakeltd - 12:34 02/10/19

Copyright 1999-2018, Shout99.com | All Rights Reserved
Privacy Notice and Terms of Use