IR35 delayed in light of COVID-19

In a surprising announcement last week in response to the COVID-19 crisis, the off-payroll reforms have been delayed until 6th April 2021. 

We take a look at what that means for contractors. 

IR35 delayed in light of COVID-19

The controversial off-payroll rules, known widely as IR35, had been set to affect around 230,000 contractors in the UK who operate personal service companies (PSCs). 

The rules, which had only applied to the public sector, were due to be extended to the private sector in April 2020, but in a bid to alleviate the growing pressure on businesses following the coronavirus pandemic, the government has taken a U-turn.

Quick shortcuts: 

Steve Barclay, Chief Treasury Secretary, said: "I can also this evening announce the Government is postponing the reforms to the off-payroll working rules, IR35, from April 2020 to April 6, 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 the same tax as those employed directly."

Whilst many businesses and contractors have welcomed the decision, there is still plenty of frustration that the government still intends to push ahead with the legislation next year.

Dave Chaplin, director of the Stop The Off-Payroll Tax campaign and CEO of ContractorCalculator, said:

“We would like to thank our 2600 campaigners for their excellent and tenacious work and we thank all the MPs who raised their concerns with the Treasury and opposed the flawed policy.

“We must now keep pushing for changes to outlaw the disgrace of ‘zero rights employment’ and to make it illegal for firms to push employer’s taxation onto contractors. We must also push for the genuine review of IR35 legislation promised by the previous Chancellor, as part of the Conservatives planned review into self-employment.”



VAT Domestic Reverse Charge Delayed until March 21

16 June 2020

A 12-month delay has been announced by the Government for the UK-wide rollout of the new VAT domestic reverse charge within the construction industry. The reverse charge had been set to come into force on October 1st, 2020.

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