Lloyds Bank is the latest firm to announce that it would cease engaging with contractors who provide their services via a personal services company.

The announcement follows this week’s statement by Barclays in which it said it would cease engaging off-payroll contractors unless they work on a PAYE (pay as you earn) basis.

The IR35 Off-payroll Working Rules, which currently apply to the public sector, will be extended to medium and large businesses in the private sector from 6 April 2020.

According to ContractorUK, GlaxoSmithKline contractors say they will also no longer be hired as limited companies, despite 1,500 of them already being under IR35 investigation.

Tax adviser Carolyn Walsh told ContractorUK, “I am sure that the banks have not considered the cost of the loss of skilled contractors to their business, and the rising cost of engaging contractors via agencies under PAYE, which will come as a surprise when agencies are prevented from making savings on employer costs using umbrella companies next year, so will be seeking rate rises.”

There were no further details disclosed on the effective dates of the changes for Lloyds or GlaxoSmithKline.

Lloyds has not yet commented.

GlaxoSmithKline has said no formal announcement on how the company will treat PSC contractors has yet been made. “GlaxoSmithKline acknowledges the important contribution that contract workers provide", a GSK spokeswoman said. "We have not yet made any final decisions regarding our future IR35 strategy. Any changes will be communicated internally first, in line with our values and expectations.”

This story has been corrected from a previous version.