How Barclays no longer hiring limited companies sits with us contractors

Quite honestly, the way that many of my fellow contractors and I feel about Barclays banning renewals on all limited company contractors and forcing us all to become PAYE or be out of work, is disappointed. But not surprised, writes a Barclays contractor.

We saw the same thing in the public sector so it almost goes without saying that it would happen in the private sector too. This is exactly the kind of blanket determination which HMRC said during the ‘consultation’ (I use that term very lightly), that they saw  “no evidence” to suggest would happen in the commercial sector. Well, already, some six months before IR35 reform actually takes effect, we’ve seen several big users of contractors make a sweeping determination, with more undoubtedly to follow.

As for how Barclays contractors are reacting, nobody I’ve spoken with will stay on a PAYE basis. Nobody trusts HMRC not to take moving to a PAYE role as an admission that their prior work was indeed inside IR35, triggering an IR35 investigation. The Revenue made this clear to us contractors when they investigated people in the public sector who did this very same thing.

That said, quite a few of us who contract ‘properly’ on a genuinely self-employed or independent consultancy basis aren’t worried. We have built up a customer base over the years from which to get other work, and so we see things like this as a risk within the nature of contracting and are confident of being able to move on with ease.

Still, there is a lot of unrest and nervousness among both those new to contracting and who have their first gig at Barclays, and also among those who have been here long-term, squarely in the middle of delivering high-profile projects.

As to how the many of us PSCs looking at leaving is going to affect work at Barclays, it goes without saying that losing a significant chunk of your skilled workforce – and losing them within a short period -- impacts project deliverable timelines.

I’d like to add that from a personal point of view, I am confident in PSC contracting’s immediate, short-term future, but long term I do believe its days are numbered. Blanket IR35 determinations like this are having a domino effect, and you can’t really blame engagers for not wanting to take the risk of judging each role on its individual requirements. While HMRC will be rubbing their hands together with glee, ultimately these decisions affect everyone. As business costs increase to bring on temporary PAYE staffing for the variable resourcing demand to carry out these projects, build these applications or improve these infrastructures, increased costs will only ever end up passed on to customers and consumers at the end of the line. That’s inevitable.

As an aside it’s been nearly a week since the official, internal announcement here at Barclays, and we still haven’t heard anything from our recruitment agencies. We’ve just had the very same message everyone online has seen, which was uploaded to the intranet here. There have been some informal chats with managers, but nothing sent by our agents. That’s further added to the disappointment. And it won’t help stem the exodus.

The Barclays announcement will possibly come to be looked back upon as just another nail in the coffin for contracting as we know it. But there’s now quite a few nails in the bank’s projects too, which I fear will suffer massively as a huge chunk of those who have been working so hard on them are PSCs. Any acknowledgement of this by the bank is outstanding.