Virgin Media IR35 Funk – They Still won’t use Contractors via PSCs

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Virgin Media IR35 Funk and contractors
Virgin Media IR35 Funk and contractors

Virgin Media IR35 Funk

There’s much contractor surprise at the Virgin Media IR35 funk which they have just announced. It used to be that when you saw the brand name Virgin attached to any company this meant it was a go-ahead firm. I remember the early days of Virgin Records when it was considered really cool.

Richard Branson must be spending too much of his time on his island paradise recently. Because this Virgin Media IR35 funk is not very cool at all. Indeed it is decidedly staid.

Contractor Questions on Virgin Media IR35 Funk

  1. What is the reason for the Virgin Media IR35 Funk?
  2. What is in the Virgin Media message to their contractors?
  3. On what basis will Virgin Media only use contractors now?
  4. How easy will it be for Virgin Media to hire contractors now?
  5. How is contractor morale after the Virgin Media IR35 funk?
  6. What does Virgin Media need most?

What is the reason for the Virgin Media IR35 Funk

With the new Government announcement that the IR35 reforms are to be postponed for a year, there is the possibility to allow contractors to continue operating via their personal services companies for a year.

This is an opportunity that Virgin Media have turned down. It was a no lose situation for them.

Because we revert back to Chapter 8 IR35 rather than the mooted Chapter 10, this means that the financial risk goes back on the contractors. It will be they who will bear the financial risks.

Yet Virgin Media will still not give them this opportunity.

What is in the Virgin Media message to their contractors

According to a message sent round by Virgin Media:-

“The Government has decided to delay the imminent IR35 reforms by 12 months, meaning they’ll now take effect in April 2021. Despite this announcement, here at Virgin Media we’ve made the decision to continue with our original policy.”

That means that after April 6th they will no longer use contractors operating via personal services companies.

You couldn’t even say that this is risk averse management. That’s because there is no risk at all to them.

On what basis will Virgin Media only use contractors now

So, instead of Virgin Media allowing contractors to use their PSCs , the company say “we’ll only engage on contracts with those who operate either through a payroll (PAYE) or Umbrella Company”.

One is tempted to buy a few shares in the company so I can go to their annual general meeting to see if their shareholders believe that the management are acting in the best interests of their shareholders in taking this decision.

After all, today was D-Day – the day they lost a lot of their contractors.

How easy will it be for Virgin Media to hire contractors now

They will now find it difficult to hire fresh ‘permitractors’ in the marketplace. Many of those contractors looking for work are contractors who dumped their blanket ban companies.

I heard of one company last week who had been turned down three times by contractors after interviews when they heard it was a permitractor role the company were hiring for.

How is contractor morale after the Virgin Media IR35 funk

I have been in touch with several contractors at Virgin Media and I’m told that permitractor morale is at rock bottom. Those contractors who have not gone are planning their exits.

If a PSC contract came up elsewhere, most of them would take it. They don’t want to be career permitractors when it was contractors that they left permie positions to become.

We have the coronavirus crisis now and Brexit to come. To lose a good few of your contractors when you don’t have to is not good management.

What does Virgin Media need most

What the staid Virgin Media management really need is a young Richard Branson with his eye on the ball. I could not imagine that the Richard Branson who started the cool Virgin Records had any part in this decision.

Nor the Richard Brasnon who almost lost his life trying to make a record going across the Atlantic in a hot air balloon.

I remember Bob Dylan was asked in the late eighties where all his followers were now. He replied “They are all computer programmers now.”

Perhaps Richard Branson and his companies should be asked this question “when did you stop being cool and started being staid?”

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For all critical IR35 news and advice for contractors click on IR35 News.

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