Lloyds, HSBC, Morgan Stanley, Barclays and Tesco Bank have all told their contract workers that they will no longer be able to work through a limited company. Going forward, these banks will all require their contract workers to go PAYE.
The companies are reclassifying their contractors as off-payroll workers ahead of private sector reforms to the off-payroll legislation next year. The changes will see responsibility for deciding if a contract falls inside or outside IR35 transfer from the contractor to the end-client.
Left with an unreliable CEST tool and little guidance from HMRC, many companies don’t feel confident that they can monitor compliancy with the rules. The decision not to use limited company contractors effectively allows them to opt-out of determinations, reducing their risk liability.
After 1,500 contractors at pharmaceutical company GSK were targeted with warning letters from HMRC, many businesses are being spurred into action. This domino effect is likely to see a boom in the numbers of contractors using umbrella companies.
Amaze offers a fully compliant umbrella solution that’s accredited by the FSCA, for more information on the IR35 read our five-minute guide here, or speak to a member of our team on 0161 464 8993