A letter from the CEO: IR35 in the finance sector

Dear member,

You may have seen the disturbing news that Barclays and Lloyds banks have announced they will no longer work with contractors who use personal service companies (PSCs). In both cases, the move is a reaction to the changes to IR35 in the private sector coming into force next April.

Barclays are moving some contractors onto PAYE and not renewing other contracts. Lloyds are moving some onto PAYE, not renewing others and also engaging some contractors through umbrella companies.

Essentially, instead of assessing the IR35 status of their contractors, Lloyds and Barclays have tried to shirk the burden by scrapping them altogether.

The IR35 campaign

For a long time, we at IPSE have been pushing hard against the disastrous changes to IR35. We warned the government time and again that if it forged ahead with the changes, ignoring the advice of experts and industry, it could expect damaging results like this.

This is a decision that is likely to harm not only the contractors involved, but also the long-term flexibility and productivity of these two businesses. I’m sure I don’t need to explain the immense value of contractors – and the vital flexible expertise these two banks will lose because of this.

Our response

We have argued forcefully against this decision in the national press. We are also contacting Barclays, Lloyds and other financial sector organisations to warn them how harmful ending the use of PSC contractors could be.

I also urge you to join the push-back by writing to your MP and alerting them to the damaging consequences of IR35 decisions like this. As we approach an election, your MP will be more alive than ever to the concerns of constituents like you. Now is the time to act – either with your own letter or our updated template.

A better deal for freelancers

IR35 is just one symptom of a tax system that fundamentally does not work for the self-employed. It is an outdated system created for two groups: employees and employers. To address this, we are launching a new campaign to tear up the tax code and redesign it to work for the self-employed.

This campaign has already had positive coverage in the national media – and we have had a good response from key government policymakers. Now, we are ramping up the campaign to influence different parties and the national debate.

So, as an IPSE member, you can be assured that as well as pushing back against this damaging IR35 decision, we are also digging at the root of the problem and working towards a redesigned tax system fit for freelancers like you.

Kind regards,

Chris Bryce,

IPSE CEO

Meet the author

Chris Bryce

Chief Executive

Chris was one of the original 2,000 members of the organisation when it was formed as the Professional Contractors Group in 1999 and was a long-time contractor with a strong client base in global scale change management.

Before becoming a contractor Chris had a career in sales and marketing followed by 10 years in senior management in the logistics industry. Chris was appointed as Interim CEO in June 2013 and accepted the role permanently in December 2013.