The impending UK IR35 Off-Payroll reform to the private sector in April 2021 is starting to gain momentum, and news coverage, as more Corporate Firms and Investment Banks finally being to announce their strategy. As you may know, IR35 will change in April 2021 (recently postponed from April 2020 due to the Coronavirus) making it the responsibility of the hirer/employer to assess whether the Personal Service Company (PSC) is inside IR35 or outside IR35. Historically, within the Corporate and Investment Banking world the hiring firm would insist a contractor/contingent worker worked via a PSC for insurance and accounting purposes - and of course to save costs. With the new IR35 rules an incorrect assessment of a contractor's employment status will make the hiring firm responsible for any unpaid taxes.

How Are Firms Implementing IR35?

What this means in reality is that most Corporate Firms and Investment Banks, to mitigate risk, have already done or will do one or more of the following:

  1. Terminate contracts for all contractors working via a PSC before April 2021 but probably before the end of March 2021.

  2. Assess all contractors to be inside IR35.

  3. Move contracts to Fixed Term Contracts paid via PAYE (Pay As You Earn).

  4. Employ contractors via PAYE/Umbrella firms.

  5. Offer some contractors a full time permanent role; this will definitely be the minority and not recommended as HMRC may well in the future challenge any contractor who changed employment status from outside IR35 to a permanent role at the same firm.

How Have Firms Announced Their IR35 Plans?

It has driven by a wait and see approach by Corporate Firms and Investment Banks as they have a tendency to follow what the majority are doing with their PSC employees. This is not unusual as I have seen them implement contract rate cuts and enforced unpaid leave almost in unison. By now most, if not all, firms should have announced their plans and unfortunately the vast majority are implementing blanket bans for PSCs/Limited Company contractors; see table. This is against HMRC's 'Reasonable Care' rule and it could find the hiring organisation at risk of a fine in the future.


The blanket bans will probably not change even though the implementation of the IR35 Reforms has been postponed from April 2020 to April 2021 as they have not actually been permanently cancelled. This is unfortunate for Contractors that have already 'jumped ship' but even Contractors still under contract should not use this as an excuse to make poor decisions regarding being Inside or Outside IR35.  

Why Wait Until The Last Minute?

Well, they know that many PSC employees will jump ship or focus on looking for other roles once they hear what is in store for them and the firms will want to get as many projects completed before this happens.

What Next?

The introduction of the amended IR35 Off-Payroll rules for the private sector has the potential to cause major disruption for employment in the IT industry.


Check out the IT Industry Blog for the latest IR35 news.

Please check out the IT Industry Employment Status Guide if you are considering changing your employment status in the near future or if you need assistance with your CV. In the meantime, hold on tight as we are in for a bumpy ride!

IR35 Roll-Out Status by Company - Reviewed Daily

The table below provides up to date information on the IR35 decisions made by firms. The information has been validated by online news articles as opposed to hearsay.