(Alliance News) - Freelance workers for Lloyds Banking Group PLC are at risk of either losing their jobs or taking a 30% pay cut due to a UK government crackdown on tax avoidance, the Financial Times reported Tuesday.
According to FT, new legislation will come into force in April 2020 that will make all medium and large-sized UK companies assess the employment status of contractors they use.
This new legislation is expected to stop "disguised employment", where workers are treated like self-employed contractors, despite being actual employees, leading to both sides paying lower taxes.
Lloyds will inform contractors of their options later on Tuesday. Some will be offered staff roles in the group, however others will have to work through third-party umbrella companies, which charge fees and deduct payroll taxes from their income, FT reported.
Other banks, such as Barclays PLC, HSBC Holdings PLC and Morgan Stanley have made similar moves, to avoid higher wages and tax bills.
https://www.ft.com/content/4c18b2b2-e916-11e9-a240-3b065ef5fc55?segmentId=080b04f5-af92-ae6f-0513-095d44fb3577
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Barclays (BARC)
Lloyds (LLOY)
HSBC Holdings (HSBA)