blog header image

Posted : 09 Oct 2019 at 09:45:26
Category: News

Share this article

Barclays planning to scrap its contractor workforce

Following reports that HSBC will stop engaging PSC contractors as a result of IR35 reform next year, it has now become apparent that Barclays will also refuse to work with contractors operating through limited companies before April 2020.

In an email, which was sent to UK line managers, the bank explained that “as a consequence” of changes to the IR35 legislation, which will see private sector companies tasked with administering IR35 status and often held financially responsible by HMRC for any mistakes, Barclays “will no longer engage contractors who provide their services via a personal services company.”

Barclays also stated that from 1st January 2020 it will only engage workers on a PAYE basis, having ruled out extending the projects of the limited company contractors it currently engages past February next year. 

“Short-sighted” but not a “typical response” to reform

In reaction to the news, Qdos CEO, Seb Maley, described the move as “short-sighted” and “unecessary” given the bank will “lose out on the flexibility and savings achieved when compliantly engaging contractors outside IR35.”

However, he also made the point that “this is not a typical response” to IR35 reform and nor does he expect it to become one. With contractors understandably concerned by further reports of a bank taking a risk-averse approach to IR35 reform, Maley said “behind the scenes there are many private sector businesses quietly preparing to compliantly engage contractors outside IR35 from April 2020 onwards.”

“A taste of the chaos to come”

IR35 lobbying body, IPSE, criticised the Government for rolling out controversial changes to the legislation which will see contractors lose the right to determine their own tax status. Deputy Director of Policy, Andy Chamberlain, said Barclays’ decision was “just a taste of the chaos to come” and called on the Government to “halt and reconsider the changes to IR35.”

He then urged other businesses not to follow Barclays’ lead, arguing that it “makes a mockery of the Government’s claim that the genuinely self-employed won’t be affected by the April 2020 rules.”

Barclays “not prepared to take any risks”

IR35 commentator and CEO of Contractor Calculator, Dave Chaplin, echoed IPSE’s concerns, describing the move as a “direct consequence of very bad legislation” and that in giving contractors no choice but to work PAYE or leave, Barclays has shown it’s “not prepared to take any risks come April 2020.” He also said “it’s absurd to suggest that 100% of the contractors working on critical Barclays projects are caught within IR35.”

As previously mentioned, Barclays is not the only bank apparently taking this drastic course of action. HSBC is also planning a workaround to IR35 reform, while it has also been reported in Computer Weekly that Lloyds is also set to offer contractors an ultimatum – a course of action that contractor accountancy, QAccounting recently dissuaded engagers from doing.

SIMILAR NEWS

blog header image
NEWS
CONSTRUCTION GROWTH SLOWS AS COSTS “GO THROUGH THE ROOF”

The pace of construction growth slowed in August as buyers reported near record rises in input cost inflation.       The bellwether IHS Markit/CIPS UK Construction PMI Total Activ ...

blog header image
NEWS
SUBCONTRACTORS HIT OUT AT HMRC OVER SLOW VAT REPAYMENTS

Specialist contractors have hit out at HMRC over the time it takes to reclaim VAT payments following a controversial change in the tax regime earlier this year. The “domestic reverse charge&rd ...

blog header image
NEWS
LABOUR COSTS ‘BREAK RECORDS’ AS VACANCIES SOAR

Recruiters have reported “record-breaking” increases in labour costs as new data shows vacancies hitting fresh highs. Between May and July, there were 38,000 vacancies in the construction ...

blog header image
NEWS
TIMBER SHORTAGE DUE TO 'UNPRECEDENTED' POST-LOCKDOWN DEMAND

The price of timber has risen sharply with builders struggling to get supplies, as post-lockdown construction and DIY projects create huge demand. The Timber Trade Federation (TTF) said supplier ...

blog header image
NEWS
UK CONSTRUCTION FACES ‘PERFECT STORM’ AS SUPPLY SHORTAGES LOOM

UK construction is facing a “perfect storm” of growing skills and materials shortages as demand for building reaches record levels driven by home improvements, the housing market and new i ...

blog header image
NEWS
DEMAND FOR CONSTRUCTION WORKERS CLOSE TO 20 YEAR HIGH

The staff shortage in construction is continuing to bite, with 33,000 job vacancies for the period of April to June according to the latest figures from the Office for National Statistics. It is the s ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory