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IR35 reforms to be delayed until 2021 due to Covid-19

Chief treasury secretary, Steve Barclay announced on 17 March that the IR35 tax reforms would be pushed back by one year, less than a week after the measures were confirmed in the Budget.

The Government has announced a last-minute postponement to the implementation of the Off-Payroll Tax to the private sector in light of the recent Covid-19 outbreak, with the legislation now due to be reintroduced in April 2021.

Steve Barclay confirmed that the decision was “a deferral, not a cancellation, and the Government remains committed to reintroducing this policy”.


What is IR35?

IR35 is a piece of legislation that allows HMRC to collect additional payment where a contractor is an employee in all but name.

If a contractor is operating through an intermediary, such as a limited company, and but for that intermediary they would be an employee of their client, IR35 kicks in and liability for any unpaid tax falls to the “hirer.”

If you want to know more about what this means to you please don’t hesitate to get in touch.

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