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Chief Secretary to the Treasury, Steve Barclay, said the deferral of changes to off-payroll working rules would help businesses and individuals within the private sector left struggling by the Covid-19 outbreak.

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Speaking in the House of Commons this evening, Mr Barclay said the reform would be delayed by a year, adding “The government is postponing the reforms to the off payroll working rules, IR35, from April 2020 to April 6, 2021”

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“This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.

“This is 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.”

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The suspension of the implementation of IR35 is being seen as a sensible measure from the government at a time of unprecedented concern for us all.

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MP’s added “Given the economic challenges that lie ahead of the UK, now certainly would not have been the right time to roll out needless tax changes that endanger hundreds of thousands of contractors’ livelihoods.”

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“That said, this is only a delay, albeit a very welcome one. It does, however, give private sector firms vital time to prepare for reform, which can only be a good thing for contractors. What matters now is that businesses use this time wisely.”

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Deputy director of policy at the Association of Independent Professionals and the Self-Employed (IPSE),Andy Chamberlain, said on Twitter: “Very sensible move by government. It would have done serious damage to self-employed businesses in any circumstances, so right that it’s paused for at least a year in this grave and unprecedented situation. Trouble is, lots of damage has already done.”

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​The responsibility for determining the status of IR35 for those working in the Public Sector remains with the Client and therefore you will still need to ensure that full tax and NI is deducted.

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For more information regarding the changes to IR35 and how this may effect you, please contact IR35@daywebster.com

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