​IR35 reforms postponed until April 2021

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Posted on March 2020 By ersg

The UK’s IR35 legislation was due to be brought in on 6th April 2020 however due to the global pandemic Chief Treasury Secretary Steve Barclay announced on 17th March that the government has taken the decision to move these reforms back until 2021.

Mr Barclay said "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 remain 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."

Many contractors will be breathing a sigh of relief as the blanket inside ruling many Clients had taken is obsolete – for now.

“ After five years of lobbying government for a proper review of IR35, we are obviously pleased and relieved on behalf of our members that the government has taken this action to remove extra burdens from the recruitment sector albeit disappointing that it has taken a crisis of this magnitude for the government to act,” said Sam Hurley, operations director at APSCo, and co-chair of HMRC’s IR35 Forum.

“I very much hope that some detailed analysis of the wider implications of this reform can be undertaken in the coming months in order to establish whether or not it should be scrapped entirely, rather than simply ploughing on in 12 months’ time,” said FCSA’s Julia Kermode.

So what now?
Here at ersg we are in contact with all our clients. As a business we will reach out to our contractors on an individual basis with specific news in relation to your contract.
Of course, at any time if you have any questions please do not hesitate to get in touch with your dedicated consultant.