The letter went on to say that, \u201cInstead, Barclays will engage on a PAYE basis for new or renewed contracts\u201d<\/em>.<\/p>\n\n\n\n Barclays said that under the new rules, it will need to determine the employment status of the worker, communicate this to the worker and the agency or intermediary involved, and then “communicate the reasons for the determination of the worker and resolves any disputes”.<\/em><\/p>\n\n\n\n “In addition, the end user (Barclays) may be held liable for collecting the correct income tax and National Insurance contributions if HMRC fails to collect these from the payer or from other parties in the supply chain,”<\/em> the letter continued.<\/p>\n\n\n\n As such, the bank said it has reviewed third-party resourcing plans and “decided it will no longer engage contractors who provide their services via a personal services company, limited company or other intermediary.”<\/em><\/p>\n\n\n\n Beyond a specified timeline, Barclays will “not extend”<\/em> contracts of existing off-payroll contractors.<\/p>\n\n\n\n The announcement by Barclays should be taken as a warning, according to the Association of Independent Professionals and the Self-employed. <\/p>\n\n\n\n IPSE\u2019s Deputy Director of Policy, Andy Chamberlain, said: “This deeply troubling decision by Barclays is just a taste of the chaos to come when the changes to IR35 are extended to the private sector next April.<\/em><\/p>\n\n\n\n For a long time, we at IPSE have warned the changes to IR35 will have damaging consequences for business. Decisions like this are harmful not just to the self-employed, but also to companies themselves, as they lose out on the vital flexibility and financial boost that \u2018outside IR35\u2019 contractors provide.<\/em><\/p>\n\n\n\n We urge other businesses not to take this short-sighted and dangerous step, and urgently call on the government to halt and reconsider the changes to IR35.<\/em><\/p>\n\n\n\n IR35 is a nightmarishly complex piece of legislation \u2013 so complex that Barclays has decided it cannot manage the risk of falling foul of it. The approach from Barclays makes a mockery of the government\u2019s claim that the genuinely self-employed won\u2019t be affected by the April 2020 rules.<\/em>“<\/p>\n\n\n\n Dave Chaplin, CEO at Contractor Calculator and IR35Shield.co.uk, confirmed that he has already heard from Barclays contractors who are planning to jump ship in December.<\/p>\n\n\n\n He said: “There’s going to be the biggest game of musical chairs in the contracting industry as every contractor tries to grab a seat with ‘outside IR35’ written on it<\/em>“, adding,“Barclays are going to write PAYE on all of theirs.”<\/em><\/p>\n\n\n\n While there is no doubt that other hirers will follow Barclays example in doing away with PSC contractors entirely, for many end clients and agencies, putting those contractors on their payroll is just not logistically possible. <\/p>\n\n\n\n Umbrella employment is a viable alternative, putting contractors out of scope of IR35, without putting strain on the engager’s resources.<\/p>\n\n\n\n Liquid Friday’s Joe Taffurelli had the following advice:<\/p>\n\n\n\n “When next year’s legislation kicks in, we may well see a shift to umbrella working, as we did in the public sector. Notably though, we are also likely to see a proliferation of tax avoidance schemes popping up to capitalise on the IR35 changes. Inevitably these schemes label themselves as “umbrella” even though they aren’t. True umbrella employees are just that – employees, with the associated PAYE tax and NI deductions and employment rights. It is therefore essential that hirers undertake due diligence on their suppliers, to ensure that their supply chain isn’t facilitating tax avoidance.<\/em>“<\/p>\n\n\n\n We have created a comprehensive IR35 guide for recruitment agencies. You can download your free copy by clicking on the link below. <\/p>\n\n\n\nJustification<\/h2>\n\n\n\n
Decision is a sign of things to come warns IPSE<\/h2>\n\n\n\n
\u201cThe biggest game of musical chairs\u201d<\/h2>\n\n\n\n
Will others follow suit?<\/h2>\n\n\n\n
IR35 agency handbook<\/h2>\n\n\n\n
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