Last night, the UK Government has radically delayed private sector IR35 reform by a life-changing 12 months, after pressure from business, colleagues and the pandemic that is Coronavirus Covid-19, the decision to not delay the off payroll rules unjustifiable.
Steve Barclay, the chief secretary to the Treasury said: “I can also announce this evening, madam deputy speaker, that the government is postponing the reforms to the off-payroll working rules, IR35, from April 2020 to the 6th April 2021.”
“Government will therefore not move the original resolution tonight, but will shortly table an additional resolution confirming that we will reintroduce the off-payroll working rule provisions by amending the bill, with a commencement date of 6th April 2021.”
“This is a deferral in response to the ongoing spread of COVID-19 to help businesses and individuals.
“This is a deferral, not a cancellation and the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same tax as those employed directly.”
The house of Lords stated in their committee meeting that the Treasury’s IR35 position was increasingly untenable, with a rising backdrop of Coronavirus, They welcome this pause.
What Does This Mean?
Any current process that a private sector business has in place for the usage of contractors can continue as normal.
The process for contracts instructed by Public Sector’s will be unchanged, whereby the Public Sector will determine the Employment Status For Tax.
What can we do to help?
We have core experience in supporting businesses in the private sector with Intermediaries Legislation (IR35). We welcome this pause for the changes and this will allow businesses of all sizes and sectors, to focus on what matters most now: Focusing in on their organisation.
Due to Covid-19, many organisations are enforcing recruitment freezes, redundancy consultations and non-essential business spend on hold. Therefore the requirement for independent contractors is more in demand now, than ever before and with the delay, it’s allowing businesses to breathe and focus on BAU.
Give us a call today to see how we’ve helped 1000’s of businesses with IR35, regardless of sector or set up. We offer a no obligation review of your independent infrastructure.