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Shock delay to IR35 private-sector changes amid Covid-19 chaos

It’s fair to say that we have seen a week quite unprecedented in the recent history of the UK and indeed, the world. Even in light of this, however, one development that few independent professionals expected until practically the moment it was confirmed, was the deferral of the previously planned IR35 reform for the private sector from 6th April 2020.

Yet, this is precisely what has happened, with the UK’s chief secretary to the Treasury, Steve Barclay, confirming in Parliament on the evening of Tuesday 17th March that the government had decided to put back the off-payroll changes to 6th April next year.

A sensational development – but also merely a ‘postponement’

While the wholesale strife and disruption caused by the coronavirus – including the associated damage to independent workers’ fortunes – means the news will not have too many contractors popping the corks, industry figures still expressed relief at the seemingly unlikely development.

Mr Barclay announced in the Commons that “the government is postponing the reforms to the off-payroll working rules, IR35, from April 2020 to the 6th April 2021”, describing it as “a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.”

He emphasized, however, that “this is a deferral, 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.”

“Very sensible move by government”

Among the observers to warmly welcome the delay was Andy Chamberlain of the Association of Independent Professionals and the Self-Employed (IPSE), who tweeted that it was a “very sensible move by government.”

He added that the reform “would have done serious damage to self-employed businesses in any circumstances, so [it’s] right that it’s paused for at least a year in this grave and unprecedented situation. Trouble is, lots of damage has already [been] done.”

ContractorCalculator CEO Dave Chaplin, meanwhile, signaled his pleasure that “the government has seen sense”, but said “we now must keep pushing for changes to outlaw the disgrace that is ‘zero rights employment’, and to make it illegal for firms to push employer’s taxation onto contractors.

“We must also push for the genuine review of IR35 legislation promised by the previous Chancellor, as part of the Conservatives’ planned review into self-employment.”

Whatever the next uncertain months and years bring, we’ll guide you through it

These are understandably very anxious times for many contractors, which is why it’s all the more important for them to have the assurance of the right partners by their side.

Our trusted providers of global payroll management and tax advice here at Link Global Management can be those partners, wherever your career as an independent professional takes you in the curious and fast-changing circumstances that await us.

Contact our highly capable and seasoned team today for all of the specialized assistance and guidance that you might require in 2020, wherever and however you are contracting.


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