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  • IR35 in the news – IBM to move away from PSCs


    There is no avoiding IR35 in the media, as plans for the Private Sector reform in April 2021 continue to take shape. We’ll be monitoring the news channels, to see what this could mean for the world of contracting.




    IBM is understood to have told its PSC contractors they must re-engage with the organisation on pay-as-you-earn (PAYE) terms or via an umbrella company by the end of March 2020 if they want to continue working for the company.

    According to contractors working at the company, who spoke to Computer Weekly under condition of anonymity, the company began formally briefing its personnel about the changes on Monday 13 January.

    “They are taking the path of least resistance and risk,” one contractor told Computer Weekly. “They want all contractors to switch to PAYE or umbrella schemes from April [as they feel] this is the best approach, instead of assessing [every contractor’s] status [individually].”

    It is understood that among the contractors affected by the decision will be software developers and engineering staff. “Many of us supply expertise that IBM does not have lots of in-house,” the contractor continued.

    The start of IBM’s contractor briefings follows two months of the company’s project managers telling them a decision on the firm’s IR35 compliance strategy would be forthcoming in due course, it is further claimed. “We are still weighing up the risks of staying on, but some are leaving,” a contractor claimed.  

    Read the original article here.


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    Whilst taking a decision like this is technically a policy change and not a blanket decision, it does open up a lot of questions around how IBM intend to ensure they continue to attract the best contractors.

    For any large organisation taking a decision like this, there will be a number of SMEs in the market ready to adapt their approach to contracting to secure these highly skilled off-payroll workers.

    Contractors will already be considering their own personal stance on IR35, some may be happy to see an income reduction to continue to work with high-profile clients and prestigious projects – others may not.

    Let’s not forget that some contractors walked away from the Public Sector when IR35 was rolled out, opting to no longer work for the client. Extending IR35 across the Private Sector may also see a shift away from clients who take this blanket approach.

    The key to successfully rolling out IR35 across your business, will be to carefully consider the complex cost and physical implications of any changes. The starting point for this however, should always be a full review on your current PSC contractors, projects and internal processes.


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