Barclays bans PSCs

Joining the likes of HSBC and the London Stock Exchange, Barclays have become the latest to issue a response to the off-payroll rules being implemented in the private sector.

Some key points to take away from the email sent by Barclays:

From April 6 2020, the rules will require the end user of the services (Barclays) to determine the employment tax status of the worker and communicate this to both the worker and the agency / intermediaries.

…In addition, the end user may be held liable for collecting the correct income tax and National Insurance contributions if HMRC fails to collect these from the ‘fee payer’ or from other parties in the supply chain.

… From January 1 2020, new contracts and contract extensions will be arranged on a PAYE basis only. Contractors who provided their services via a personal service company, limited company, or other intermediary and who choose to continue working for Barclays can do so on a PAYE basis (via the agencies and managed services providers they currently use).

Managing director of granite, Jovan Pavlicevic commented: “This move further cements the fact that end users are unwilling to take the risk on behalf of contractors. Rightly or wrongly this sends a clear message to the market. The days of the PSC are effectively over. We and our many recruitment agency clients expect this to create an upward pressure on rates as the increased tax take starts to take effect. As always in times of uncertainty and legislative upheaval, we’ll see winners and losers created.”

The granite board has over half a century of specialist knowledge on this subject. We’re currently attending meetings with our agency clients to educate, and present solutions to their end user clients. To get an expert on your team, contact us today.