IR35 reforms delayed for 12 months amidst coronavirus outbreak
18 March 2020
Chief Secretary to the Treasury, Steve Barclay, confirmed in parliament on the evening of 17 March 2020 that the reforms to the off-payroll working rules, initially due to take effect from 6 April 2020, would actually be delayed for a period of 12 months, until 6 April 2021.
“I can also announce that the Government are postponing the reforms to the off-payroll working rules IR35 from April 2020 to 6 April 2021. The Government will therefore not move the original resolution tonight but will shortly table an additional resolution confirming that we will reintroduce the off-payroll working rules provisions by amending the Bill, with a commencement date of the 6 April 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 remain committed to reintroducing this policy to ensure that people who are working like employees, but through their own limited company, pay broadly the same tax as those employed directly.”
This is part of additional support for businesses and individuals to deal with the economic impacts of COVID-19. This means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021.
It is important for payroll professionals any other impacted individuals to remember that the reforms are being postponed, and not completely cancelled, so it would be advisable to remain informed about the changes that will come into effect from 6 April 2021.
The CIPP understands that members must have an abundance of questions in relation to the postponement of the implementation of the changes to IR35 / off-payroll working rules. As soon as any further information becomes available, it will be posted via News Online and various social media platforms to ensure that members are as up to date as possible. Unfortunately, within the current economic and social climate, with everything being affected by coronavirus, it is not certain what will change from one day to the next.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.