IR35 Upheaval – Agency Calls Contractor to Ask If He’d Rather Use His PSC

IR35 Upheaval for Companies

It looks as if there will be even more IR35 upheaval – this time in favour of contractors.

Yesterday we asked whether client companies were too far down the line with blanket banning contractors using personal services companies. Would they just continue on that path? Or would they revert to allowing contractors to use personal services companies for the next year.

Questions on Further IR35 Upheaval

1. What did the agency say to the contractor about using his personal services company?
2. What will other companies do after this new IR35 upheaval?
3. Why did the Government say companies blanket banned contractors using PSCs?

What did the agency say to the contractor about using his personal services company

We got our answer from one contractor yesterday. He said:-

“I start a new contract on Monday with a company in the financial sector. Yesterday the contract was inside IR35. This morning at 9:10 the agency called me and asked if I’d prefer to use my Ltd company or go through an Umbrella Company. It didn’t take long for me to decide. “

That’s very good news for contractors. Of course, this is just one company. We will have to wait and see what other companies will do.

What will other companies do after this new IR35 upheaval

We hear of a couple of major banks who will just continue down the blanket ban path.

However, we have also heard of other major companies who are going to go through more IR35 upheaval. This time, though, we hear that it is in contractors’ favour. They are going to reverse their previous decision to blanket ban PSC contractors. – at least for another year.

Why did the Government say companies blanket banned contractors using PSCs

The Government recently said that some companies, after a review, decided that using PSC contractors was no longer their best business model.

W poured scorn on this at the time and suggested that the only reason they were changing their business model was because of fear of fines from HMRC and not because they thought they had found a better model.

So, in the coming days we will see if this is true or not. Of course it may have been different even for the major banks if this decision and IR35 upheaval had come earlier.

But, as they say, better late than never.

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