RBS Contractor Quits Over IR35 Blanket Ban – Freelancer Gives Reasons

RBS Contractor IR35 Decision
RBS Contractor IR35 Decision

RBS Contractor Quits Over IR35

An RBS contractor has emailed us saying that that he would not take up RBS bank’s renewal offer and has decided to quit. RBS are blanket banning contractors who use personal service companies All their contractors must become PAYE – if they stay.

Here are his reasons.

RBS Contractor Questions on IR35 decision

  1. Why I will no longer contract with RBS
  2. Why am I treated like an employee for tax purposes only?
  3. What Impact Will the RBS contractor decision have on the bank?
  4. Are there outside IR35 contracts still available?
  5. Should an RBS contractor make a decision based on principle
  6. What Outside IR35 options does this RBS contractor have?

Why I will no longer contract with RBS

I have decided not to extend my current contract with RBS beyond the 27th February when it expires for the following reasons:

Firstly I am genuinely outside IR35!

  1. I work from home,
  2. use all my own hardware and software, h
  3. ave full control over the way I deliver project objectives,
  4. do not get expensed for hotel stays/travel costs when I do decide it is beneficial for me to attend a meeting at HQ,
  5. do not receive (nor do I wish to) any employee perks such as paid holidays, pensions, redundancy protection, health and life insurances, gym memberships etc.

Why am I treated like an employee for tax purposes only

Why should I as a genuine self-employed contractor be expected to be treated as an employee ‘for tax purposes’ and yet not be treated as an employee for any of the benefits.

It would cost me approximately £1500 per month to work via an Umbrella company when I am genuinely self-employed both in contract and work practices.

What Impact Will the RBS contractor decision have on the bank

Secondly, there has to be an impact to the banks for them or any other companies that have or are considering following their example. Otherwise to put it bluntly why would every other company not consider following suit?

The sledgehammer and nut approach does save RBS any administrative overhead of applying per-employee tax status assessments.

It is slightly different for banks in that any increase in employer NI contributions may well be offset by the reduction in their VAT bills.

However if they are subject to some serious brain drain that directly impacts then and their customer – then they will be forced to review their stance.

Are there outside IR35 contracts still available

Thirdly, there are still ‘Outside IR35’ contracts out there!

Obviously work practices as well as contracts both need to be rightfully outside IR35 and every contractor should have both reviewed by independent professionals, but they are there.

Any contractor thinking of just accepting it ‘for the easy life’, or maybe to avoid working away for a period, in my opinion should re-think.

Short-term pain is worth long-term gain. And also, don’t be too shocked if you receive a knock on the door from HMRC asking for back taxes because “clearly you were always inside IR35!”

Should an RBS contractor make a decision based on principle

Fourthly there is the Principle.

Every contractor, and most perms, whom I have discussed this with agree that treating an employee ‘for tax purposes only’, without receiving any of the benefits and protections is immoral and simply Treasury/HMRC wanting to have their cake and eat it.

If you feel strongly that it is wrong then do something about it.

I met my Conservative MP in person, and for all the good it did I can at least say I tried. The number of contractors who haven’t even done that is astounding given the impact this will have on their livelihoods.

If we were French we would have been hiring out Tractors and parking on the Motorways in our droves!

What Outside IR35 options does this RBS contractor have

I do have some potential outside IR35 options coming to fruition. I will probably take a hit in the short term financially, but nothing like as much as if I had stayed and gone the Umbrella route.

I am sure there will be more contractors to follow me out! I already know of 2 x highly regarded Project Managers who have done the same.

This will be the same for all banks. In my opinion anybody considering staying in any of them should have their head examined, without at least trying to get something new.

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    1. BMYM just released their position on ir35. They’ve put in place a blanket approach, no rate increases. Plus the main agency who hires thier contractors is forcing contractors to use their choice of umbrella companies.

      I’m happy to discuss more and provide emails etc, just contact me

    2. HMRC estimates that 2/3 of contractors using a limited company are outside IR35 and that therefore they are not affected by the proposed change.
      Fear, hassle factor and perceived lack of resources should not stop the correct treatment from applying. IR35 assessments from highly competent experts are available from £150 – money well spent in my view.

    3. Please sign this petition https://www.change.org/p/hmrc-abolish-ir35-and-halt-ir35-reforms-due-in-april-2020?recruiter=false&utm_source=share_petition&utm_medium=facebook&utm_campaign=psf_combo_share_initial&utm_term=psf_combo_share_initial&recruited_by_id=4e2c0780-3375-11ea-85ea-4336aa8ddbb8&share_bandit_exp=initial-13115797-en-GB&share_bandit_var=v0&utm_content=fht-13115797-en-gb%3Av5 and we can get this unfair legislation amended or revoked. Remember Philip Hammond was being economical with the truth when he said genuine consultants and contractors would have nothing to fear. Can he explain why financial service companies are having blanket everyone is inside ir35? I would like to hear Philip Hammond’s response.

    4. Doesn’t the change to the operation of IR35 drive a coach and horses through the legal separation of limited companies and their directors?

    5. Same at ASI in Edinburgh. 1 of my team has already left to work in Dublin, and myself and 3 others are refusing to take a ‘determination” as it is only a paper exercise for ASI to hide behind. They have no intention of offering outside IR35 contracts. We will all finish up on 28th Feb to try and find an outside IR35 role somewhere else – probably Dublin also.

      What is awful though, is that ASI has started issuing results of their determinations for those contractors who said they would take them (prob about 60%). The formal document makes no distinction between a future contract they would offer and the existing and previous contracts carried out by the contractor. It states that ASI determines that the they (the contractor) IS operating inside IR35 and goes onto list reasons it believes this to be the case around the working practices. The thoughtlessness of ASI as to the contractors liability to HMRC and the impact of how they have worded the document is nothing short of disgusting.

      I’m happy to share a redacted document as example.


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