IR35 reforms delayed until 2021

A result of the coronavirus outbreak the Government have put their reforms to IR35 for the private sector on hold until 6 April 2021.

The news was announced at the end of the parliamentary debate on the Budget speech by Steve Barclay, chief secretary to the Treasury.  Mr Barclay said “The government is postponing the reforms to the off payroll working rules from April 2020 to 6 April 2021.  This is a deferral in response to the ongoing spread of coronavirus to help businesses and individuals affected.”

“This is a deferral, not a cancellation.  The government remains committed to reintroducing this policy reform to ensure that people working like employees, but through their own limited company pay broadly the same tax as those employed directly.”

This delay will be welcomed by individuals who still operate as contractors through their own limited companies but were considering signing up with an Umbrella Company due to the new IR35 rules.

Many contractors will have either liquidated their company or will be in the process of doing this.  However, if you haven’t got to that stage yet then you now have a one-year reprieve before the new rules kick in.

Photo by Martin Sanchez on Unsplash

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.