IR35 changes postponed for a year

18 March 2020

In a statement to the House of Commons on 17 March, the Government announced that it will be postponing the planned reforms to the off-payroll working rules that were due to be implemented on 6 April 2020.

As we reported earlier (see Government offers help with off-payroll working rules), there has been considerable resistance to the introduction of these significant changes to the IR35 rules and HM Revenue & Customs (HMRC) has already had to promise to take a light touch approach towards penalties.

However, in the latest statement, Chief Treasury Secretary Steve Barclay confirmed that the date for implementation had been put back to 6 April 2021.

“This is a deferral due to the ongoing spread of COVID-19 to help businesses and individuals,” he said.

The Government has stressed that this is a deferral, not a cancellation, and that it remains committed to reintroducing this policy to ensure that people working like employees but through their own limited companies pay broadly the same tax as those employed directly.

“The Government has done the sensible thing by delaying the changes to IR35 in the private sector,” Andy Chamberlain, Director of Policy at IPSE (the Association of Independent Professionals and the Self-Employed) said. “These changes have already undermined the incomes of many self-employed businesses across the UK. However, they would have done even more serious damage if they had gone ahead as planned.”