Limited company contractors at Lloyds face “divisional discussions” about their future at the bank, following its plan to ban them from March – a month before IR35 reform bites.
An internal memo by Lloyds adds that PSCs have from yesterday (Oct 9th) and until two weeks on Friday (Oct 25th), to meet their division representatives and set their preferred course of action.
That action is limited to only three unenviable options, however; go umbrella; go PAYE or quit and be out of work, but the former two options depend on the bank deeming the PSC’s skill to be needed.
‘Frequently Asked Questions’ about both IR35 reform and Lloyds’ policy on it have now been sent to the affected PSCs, seemingly to try make the decision-making process less confusing.
But even if Brexit or the like derails HMT’s draft IR35 legislation from passing into UK law, Lloyds says its policy of no longer engaging limited company contractors will still go ahead.
Internal resources on its policy on IR35 – such as a dedicated “microsite” on the off-payroll rules for PSCs to access — do seem “thorough,” a status adviser said last night.
Affected contractors are less pleased at Lloyds ruling out ‘rate adjustments,’ indicating that PSCs will not be compensated for the extra tax they will owe, should they become PAYE.
One Lloyds contractor says it’s what the bank has as good as ruled in which irks more, in place of contractors.
“Rather than using a large consultancy, [which] can be slow and charge much more, why not take on a contractor, individually assess them [for IR35] and accept the risk that you might have to pay a little more for them if a PAYE decision goes badly at a later date?”
“I know the bean counters probably can’t manage to think this way,” the Lloyds contractor said, “but it makes sense to me.”
Andy Chamberlain, deputy policy director at contractor group IPSE said Lloyds’ decision to halt hiring PSCs ahead of IR35 changing was “short-sighted and extremely damaging”.
“And not just for the self-employed,” he added, “it will be bad for contractors and bad for business.
“IR35 is impossibly complex, and for a long time, we have warned the government against forcing this complexity onto businesses across the UK. The risk is that they will panic, as Lloyds seems to have done, and harm the self-employed and the wider economy.”
A spokesperson for Lloyds was contacted at the time it issued its three options to limited company contractors, but is yet to comment or reply with a statement on the matter.