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IR35 reforms delayed due to Covid-19

With the recent outbreak of Convid-19, the Government have been tackling methods as to how to continue to support the economy and protect businesses. On Tuesday, Chief Treasury Secretary Steve Barclay announced that the extension of the off payroll working rules to the private sector will be delayed and come into effect in a year’s time.

The Treasury had maintained that these new changes were fundamental to addressing “fundamental unfairness” surrounding non compliance with the current IR35 rules.  These measures would have seen every medium and large private sector business becoming responsible for determining the status of any contract worker.

Barclay confirmed that the Government have introduced this change to protect the economy and this is not a cancellation of IR35 which is still due to come into effect on 6th April 2021. Due to the economic uncertainty, the Government feel that the effects of IR35 and the potential extra spending it would cause businesses would add to the current stress felt by the population.

This push back will give private sector businesses extra time to prepare for IR35 and to make the relevant changes ready for its introduction next year.

Of course, this does not postpone IR35 completely but for the time being it remains the contractor’s obligation to review their own employment status.

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Posted in: Covid-19 Updates