The Secret Contractor: Is Microsoft’s IR35 U-turn a sign of changing tides for contractors?

“Blanket bans” – a phrase us contractors have heard all too often. We hear that there is no such thing, but in fact it’s just a coverall statement from companies who choose to only engage with skilled consultants through the PAYE model. But whatever it is, it’s just one of the nuances we have to deal with on an ongoing basis to remain in the self-employed world.

I’ve chosen to continue to only engage with organisations who fairly assess their flexible resourcing needs and operate outside of the IR35 Chapter 8 and Chapter 10 legislation. I will acknowledge that not everyone is able to work in this manner but I just wanted to stay true to my beliefs. Barring a few months down time here and there, I’ve been able to continue doing what I do.

Although the financial sector companies were one of the first to implement these “decisions” for the start of FY 2020, other large organisations followed suit, and the IT sector where I work was no different. One by one, they adopted the same stance and the target market reduced. Don’t get me wrong, there are still opportunities out there, but they are somewhat more limited. Bizarrely, opportunities in the public sector, outside of the legislation, opened up more.

However, one email (well, LinkedIn connection request), stopped me dead in my tracks this week. A well-known agency working with Microsoft, reached out again with an ‘opportunity’ to work on their Fast Track team.

For those not in the know, those teams are there to help Microsoft’s clients adopt their online services on-mass and at a rapid rate. The team, for years, have mainly been contractors, or ‘vendors’ as MS refer to them as.

Back to the request; “Quick overview of the contract: - Rates are negotiable at the moment, sit on a PAYE model but come April next year will be moving to PSC’s again” [sic].  Sorry, what?

“Come April next year we will be moving to PSC’s again”.  Yeah, I had to read that again, and again, and again. No, my eyes weren’t deceiving me – one of the largest organisations in the country were now reversing their “blanket ban” and choosing to re-engage with off-payroll contractors!

“What will it mean? How will it operate? Is this the start of many? How? Why?”  So many questions!

I’ve heard about the implementation of the offset mechanism that might come to fruition in April of 2024, however, is this the first example of a proactive corporate approach, embracing the above, to garner the best talent again?

Is this the start of the power returning to the independent contractor. Is this the breakthrough that we have been waiting for to set a precedent? Will others follow suit?

Whatever the answers, I for one am keen to see what happens at the start of the next financial year.

Oh and my response for those interested… “Thanks for reaching out, but I only engage on an outside IR35 business-to-business model. Best wishes with your search.”

If you would be interested in anonymously sharing your own experience of IR35 or another issue relating to self-employment as part of a future secret contractor blog, please email [email protected].