Vodafone Contractors IR35 Ban on Using Personal Service Companies

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Vodafone Contractors IR35 Ban
Vodafone Contractors IR35 Ban

Vodafone Contractors IR35 Ban

Many contractors will be hit by the Vodafone Contractors IR35 ban. It was announced on Friday that Vodafone is the latest company to issue a blanket ban on contractors using personal service companies.

It’s astonishing that far more private sector companies are issuing blanket IR35 bans on contractors than public sector bodies. Even public sector organizations who had blanket bans on contractors have now relaxed this a bit. Even HMRC are using personal service company contractors.

Questions on Vodafone Contractors IR35 Ban

  1. What options are Vodafone giving their contractors?
  2. Will Other Telecoms Companies follow the Vodafone Contractors IR35 ban?
  3. Why are so many of the UK’s Big Companies blanket banning contractors?
  4. What do those companies know that we don’t?
  5. How long has contracting in the UK got left?

What options are Vodafone giving their contractors

Vodafone are giving their contractors three options:-

  1. Go PAYE with their agency
  2. Go PAYE with an umbrella company
  3. Leave

Contractors have got till the end of February to switch across.

It’s still to be decided how long contractors have got to choose which option they will go for.

Will Other Telecoms Companies follow the Vodafone Contractors IR35 ban

This is the first company in the telecoms industry to declare what they are planning to do with the IR35 changes. Other industries don’t have the same reputation for copying each other as the banking industry does.

However, here is a risk that other telecoms companies will follow suit.

The Vodafone contractors IR35 ban could spread.

That is what happened with the big banks after HSBC announced they would take no more PSC contractors.

It is to be hoped that the other telecoms companies go their own way.

Why are so many of the UK’s Big Companies blanket banning contractors

It is astonishing how many of our big companies have decided to go the blanket ban route.

After all, HMRC will guarantee that if a contractor passes their Check Employment Status for Tax (CEST) test then they will not come after the company for tax even if the contractor is later judged inside IR35.

But Vodafone stand to lose a lot of their best talent if their contractors don’t agree to getting back less than half that HSBC pay for them.

It seems that some are considering the umbrella company route. However, others plan to leave.

What do those companies know that we don’t

The only thing I can think of is that they know something that we don’t.

After all there was a promise in Boris Johnson’s Queens Speech that “We will increase fairness and and flexibility in the labour market by stopping employers and workers experiencing significantly different outcomes from flexible forms of working.”

Add in Treasury Minister Jess Norman saying recently when answering a question in Parliament on IR35 “There is only 10% compliance in this area”.

One presumes he, Boris and Sajid intend to make the other 90% ‘compliant’ too.

How long has contracting in the UK got left

There is a Budget on December 19th if and when the Conservatives win the election. That may be when the final dagger is plunge into the heart of contracting in the UK.

It’s possible that our major companies already know what this is. And that may be the reason for the Vodafone Contractors IR35 ban.

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