Lloyds Bank vs IR35

  • October 09, 2019

At the end of September, in the form of a letter sent to their contractors, Barclays went ahead and announced that “as a consequence” or IR35, “Barclays well no longer engage contractors who provide their services via a personal company, limited company or other intermediary.”

“Instead, Barclays will engage on a PAYE basis only for new or renewed contracts.”


It wasn’t going to take long for other banks to follow suit; and as of yesterday (October 8th), Lloyds will be distributing the details of the long-awaited decision – they’re firing all of their contractorss by or before April 2020, and won’t be bringing on any further contractors going forwards.

It makes sense, I suppose – the new rules won’t come into effect until April 2020, but why not get ahead of the game instead of delaying the inevitable? No on wants to play catchup, when other banks including Barclays, Morgan Stanley and HSBC have already made similar announcements.


Lloyds will have to now communicate with their contractors, probably in the form of an in-house announcement or even one-on-one meetings, and they’re likely to be given a couple of options.


The first would be, let their current contracts run, and then just don’t renew. What the contractor does after that is up to them, but renewing their contracts won’t be an option.

Of course, if the opportunity presents itself, the contractors could be offered a permanent position. This means that they’d be PAYE, would probably report to a manager, and maybe even be required to wear some form of uniform – though I confess I’m speculating somewhat here. The agreement would be an internal one, and may even differ from person to person. We’ll just have to wait and see what happens.

And then there’s door number three, which has a number of wide-eyed and eager umbrella companies enticing contractors their way with the smell of doughnuts, fresh coffee, and a viable solution to the “I’m self employed and don’t want to change” challenge.


Contractors have until October 25th to decide, and whichever route they go down, there’s a couple of months to implement the changes – hence Lloyds announcement now, and not in March of next year.


One question springs to mind – why don’t Lloyds just ask their contractors to take the CEST (Check Employment Status for Tax) Test. If a contractor passes, they just carry on as normal, and if they don’t there’s always door number three to fall back on. I don’t have an answer to this – but I’m sure someone out there does… ?


Written by Peter Grint, Operations Manager at IDPP

Follow Peter @PGrint | Follow IDPP @IDPP


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