Off-Payroll Working reforms continuing to go ahead as planned

20 May 2020

Despite an attempt to see its further delay MPs failed to vote through the amendment proposed by David Davies, Conservative MP for Haltemprice and Howden and the reforms seem now to be one step closer to being introduced in April 2021 with the bill moving to the committee stage within parliament.

 On 19 May 2020, the Finance Bill, which sets out budget measures, including the delays to the Off-Payroll working reform (commonly known as IR35) were debated in the House of Commons with  David Davies putting forward the proposal to extend the delay of the rule changes regarding Off-Payroll Working until April 2023. 

David Davis MP argued that: “In the light of the impact that coronavirus is having across all sectors of the economy, the government have ​rightly committed, in the motion, to postponing the planned reforms to IR35, but only until next April. The effects of the pandemic are going to be felt for considerably longer than one year. On this basis, in April next year self-employed contractors will be hit with unnecessary costs, confusion and uncertainty, just as many of them are getting back on their feet after the coronavirus has wreaked havoc across the economy. It is the self-employed and small businesses that make up the beating heart of our economy, and they will power the recovery of our economy out of this crisis.”

Despite his attempt to sway a further delay, MPs failed to vote through the amendment proposed. 

The government’s financial secretary to the Treasury, Jesse Norman backed the decision and stated; “To help businesses and individuals deal with the economic impacts of the coronavirus, on 17th March the government announced that the reform to the off-payroll working rules would be delayed by one year from 6th April 2020 until 6th April 2021. The amendment would delay the introduction of reform by a further two years to April 2023, but it is hard to see any genuine rationale for this further delay.”

The impact of these reforms will see every medium and large private sector business in the UK become responsible for establishing the tax status of any contract worker. Opposers to these reforms fear the change will have a huge impact, not just on those business who use the services of Personal Service Company’s (PSC), but for the private sector contractors who currently operate their business under PSC’s.

 


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