Deutsche Bank IR35 Decision – Bad Contractor News at Sajid Javid’s Old Bank

Deutsche Bank IR35 Decision for Contractors
Deutsche Bank IR35 Decision for Contractors

Deutsche Bank IR35 Decision

The Deutsche Bank IR35 decision is that they will no longer use contractors who operate via personal services companies.

When Chancellor Sajid Javid was Managing Director of Deutsche Bank, prior to going into politics, he said that the government should “repeal the silly IR35 tax”.

Now he is the Chancellor who is implementing the IR35 changes in the private sector. And the bank he used to run are no longer going to use PSC contractors.


It’s down to money on the Chancellor’s side and fear on the UK major companies’ side.

Contractor Questions on Deutsche Bank IR35 decision

  1. Who is responsible for private sector IR35 changes?
  2. Why are the IR35 changes being made?
  3. Why are so many companies blanket banning PSC contractors?
  4. What options are Deutsche Bank giving their contractors?
  5. How big a blow to contractors is the Deutsche Bank IR35 decision?

Who is responsible for private sector IR35 changes

It wasn’t Sajid Javid who decided that the changes would be implemented in the private sector. It was the previous Chancellor Philip Hammond. Both he and Prime Minister Teresa May said that “It is an unfair anomaly that a self employed person earning £100,000 pays less tax than an employee earning £100,000 a year.”

So, why is Chancellor Sajd Javid implementing a policy he told the government a few years back to repeal? He called it silly after all.

Why are the IR35 changes being made

The answer is Money. The Treasury reckon that this will bring them in £3 billion over 4 years. However, no one is calculating the cost to all the UK’s major companies in implementing this. I would be willing to wager that if one did a proper Cost / Benefit Analysis of the changes the costs would easily outweigh the benefits.

Lower profits at our big companies will mean less tax paid. Fewer contractors employed will mean those out of work contractors will not be paying tax.

It will make the flexible workforce a lot less flexible.

Why are so many companies blanket banning PSC contractors

The reason that so may big companies are issuing blanket bans on contractors using personal services companies is because of fear. They are afraid that HMRC will come after them with massive fines if they get it wrong.

They have already seen this happen in the public sector. The NHS did everything by the book and tested their contractors using HMRC’s Check Employment Status for Tax IR35 tool.

HMRC said that they would stand by any results using the test even if the contractors was later shown to be inside IR35. The one get out for them was that the data entered had to be correct.

And they used that get out to fine the NHS £4.3 million.

Who decided that the tool was misused? It was HMRC.

To whom do you appeal if you don’t agree with the verdict? It’s HMRC.

So, basically, you are guilty if HMRC say you are guilty.

And that’s why companies are declaring blanket bans on using contractors who operate via PSCs.

What options are Deutsche Bank giving their contractors

Deutsche Bank are giving their contractors three options:-

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

How big a blow to contractors is the Deutsche Bank IR35 decision

The Deutsche Bank IR35 decision is yet another blow for UK contractors. Not a single bank, so far, has come out and said that they will continue to take personal service company contractors. And most banks have declared blanket bans on the use of personal services companies.

If any were to keep using PSC contractors, if they are outside IR35, they would get all the best freelance talent in the banking sector.

But, so far, it is looking pretty grim.

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