Great Britain: two banks ban consultants from providing services via private sector consultancies in a bid to avoid the new IR35 reform

The IR35 tax reform is intended to combat disguised employment situations from occurring within medium and large private sector businesses. From April 2020 these businesses will have to indicate if services providers should be paying employee taxes and social contributions and they will also be held responsible if errors are found to exist (c.f. article No. 11227). Some employers, anxious about the repercussions of the reform have been getting their houses in order ahead of time. According to the www.contractoruk.com site, HSBC bank was recently the first bank to ban all private sector consultants (PSC) from providing services unless contractual arrangements were altered so that they operate through third party agency companies. The website also indicated that Lloyds Banking Group had made a similar move. Services providers are now fearful of this snowballing across the banking sector and beyond. Some PSCs are calling for the government to act quickly to stem a potential serial insolvency situation within the private sector consultancy business.