According to recent news, there are two financial firms who have imposed numerous renewals against hundreds of limited company contractors which are believed to be their strategic move against the IR35 reform.
Morgan Stanley and M&G Investments plan to stray away from PSC contractors after some time this year. M&G Investments plan to do this in December 2019. Currently, Morgan Stanley and HSBC have an air of uncertain around them regarding the future of PSCs.
Interestingly, Morgan Stanley and HSBC both have offered contractors with ‘options’ like working inside IR35. On the other hand, contractors who are associated with M&G have only been informed that after December “something will be in place”.
The Resource Solutions—also provides HSBC with contractors— and M&G are struggling with a solution. Meanwhile, contractors are waiting patiently.
According to a spokesperson that belongs to M&G Investments’ parent company, Prudential, they are still planning on how to work with IR35 and they intend to inform their affected contractors about the new approach. He added that “In line with the rest of the financial services market, it is imperative we operate a fully-compliant, revised engagement model.”
Experts believe that HMRC should enforce larger firms to have a position of Senior Accounting Officer who can handle the responsibility for the accounting and tax arrangements of their operations.
Additionally, these officers are liable to personal fines along with their companies in case they do not provide HMRC Customer Compliance Managers with the appropriate risk processes.
Kate Cottrell—an IR35 specialist said that senior accounting offers don’t seem interested to see how potential solutions, the results of consultations, or the draft legislation looks like. She explained that since there are three separate dates for them—after which the PSC contractors cannot engage—it is apparent that the actions that were proposed are associated with the SAO rules while the declaration dates are attached with a specific company’s accounting year.
Beginning from October 2019, Morgan Stanley will stop with the PSC hiring. One MS contractor revealed that he is pressed to make a decision within two days. He stated that
“[The options are] leave MS; go full-time or go PAYE. [But] I’m not sure of the ins and outs of going PAYE…I’m also not sure about if I want to tie-up [my] company and go full-time.”