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Some of the nation’s largest banks are forcing personal service company (PSC) contractors to go on the payroll, a move that will leave many with dormant limited companies. Here’s how you could close your PSC in a tax efficient manner if you’re affected by the banking sector contractor ban.
Under reforms to off-payroll working legislation, large organisations will be made responsible for judging a PSC contractor’s IR35 status from 6th April 2020.
With the lofty aim of making Britain the best place in the world to start a business, the Small Business, Enterprise and Employment Act has received Royal Assent. Now enshrined in law, the Act promises, amongst other features, vastly improved access to finance for start-ups and SMEs.
Neil Armitage Operations Director, Umbrella Accountancy Services, commented “In doing so the Act seeks to scratch an itch that has irritated many of Britain’s budding entrepreneurs: the banking and finance industries have recovered their solidity without stretching their books sufficiently to support Start-Up UK.
UK banks Barclays and Lloyds appear to have followed the example set by HSBC and others by blocking the engagement of limited company contractors when private sector IR35 reforms take effect.
A letter sent by Barclays to contractors suggests that the bank will stop using personal service company (PSC) contractors and tax all contractors in the same way as salaried employees.
