Barclays Bank tells contractors to go PAYE or leave.

“A taste of the IR35 chaos to come."

According to IPSE (the Association of Independent Professionals and the Self-Employed) the announcement is a sign of the damage the changes to IR35 will do, while Dave Chaplin, CEO of of ContractorCalculator has said the move isn’t a blanket assessment but a sign that the company is not prepared to take any risks when the reforms hit the private sector. “The bank is choosing – by inference – to pay more for its contractors,” says Chaplin. “This move is a direct consequence of very bad legislation. It’s absurd to suggest that 100 per cent of the contractors working on critical Barclays projects are caught within IR35. The Treasury and HMRC have repeatedly said that these reforms should not affect the genuinely self-employed. This demonstrates the untruthfulness of that claim.”

Indeed in a letter to contractors, Barclays have explained that instead of being liable for their employment status, it “decided it will no longer engage contractors who provide their services via a personal services company, limited company or other intermediary.”

“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,” said IPSE’s deputy director of policy, Andy Chamberlain. “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 ‘outside IR35’ contractors provide.

“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,” Chamberlain concludes.

“IR35 is a nightmarishly complex piece of legislation – 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’s claim that the genuinely self-employed won’t be affected by the April 2020 rules.”

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