Deutsche Bank, IBM, and Microsoft have responded to the IR35 reform by banning limited company workers. It has been considered as a positive indication for clients who are assessing the status of PSC on a case-by-case basis.
Even with the backing of experts for suggesting ‘reasonable care,’ a few case-by-case assessments concerning IR35 are resulting in outcomes that are similar to blanket determinations.
For example, at a financial firm that received positive praise due to avoiding the ban on PSCs, the figure of contactors evaluated outside IR35 was found in the single digits.
According to a spokesperson from the firm Aberdeen Standard Investments, out of 1,800 PSCs who were offered a test, 100 declined and intended to quit whereas those caught were within single digits.
However, since those were job-specific tests, the IR35 determination received by the PSCs came out based on their roles such as Project Manager or Tester.
An individual who got to observe role-based tests opined that their execution was good where every PSC received a personalised latter, mentioning the rationale and result.
On the other hand, a contractor at ASI was not too happy and stated: “[There will be] no rate rises to cater for Employer NI, [the] same gross amount will be paid to either ‘Ltd’…or umbrella.”
He explained that ASI has announced that they have no interest in the matter; they plan to proceed with the same gross day rate that was previously agreed with the agency. Therefore, it is the prerogative of the agency and their contractors to manage the situation.
Similarly, another contractor said that a huge chunk of contract roles were put inside. It seemed that without consulting the contactors, the assessment was conducted.
Nationwide’s contactors had similar experience. A spokesperson said that the in-house recruiter of the building society revealed recently that even though his assessment was to be conducted individually, he was certain that he would deem inside IR35.
Newton Investment Management, another financial services firm, requested all of its limited company contractor workers to either choose from being jobless or convert to umbrella companies.
Therefore, bigger financial organisations launched the PSC ban and are continuing with it, with smaller businesses following them closely. One such example is the Rabobank in London. The firm will no longer engage PSC contactors after February.