The government has sensationally delayed the private sector IR35 reform by 12 months, after pressure by peers and the Coronavirus, made not deferring the off-payroll rules unjustifiable.
Steve Barclay, the chief secretary to the Treasury stated that this was not a cancellation of the controversial policy, but a necessary delay due to the Coronavirus outbreak:
“The Government is postponing the reforms to the off-payroll working rules (IR35) from April 2020 to 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 that people working like employees but through their own limited companies pay broadly the same tax as those employed directly.”
This will give clients more time to understand the ‘off-payroll’ rules, and hopefully take a less panicked approach to assessing contractors’ employment status (i.e. far less blanket inside IR35 assessments).
Further Government literature covering this deferral is expected to be published soon, together with measures aimed at supporting businesses in general during the COVID-19 emergency.
If you would like any further clarification, please do not hesitate to contact us.