Coronavirus: IR35 delayed

There was some good news announced last night in the House of Commons.

In the Budget notes it was confirmed that the IR35 changes were going ahead. However, last night Steve Barclay, the chief secretary to the Treasury and former Brexit Secretary, said:

‘The government is postponing the reforms to the off-payroll working rules, IR35, from April 2020 to the 6th April 2021. 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 rule provisions by amending the bill, with a commencement date of 6th April 2021. This is a deferral in response to the ongoing spread of COVID-19 to help businesses and individuals.’

It would seem that 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.’

What to do

As this announcement has come very late in the day and changes to your contract position may have already commenced I would suggest the following urgent actions:

  1. Speak to your client to see whether they are prepared to continue working with you under the old method.
  2. If you have already signed up to an umbrella review the terms of the agreement to see whether you have the right to continue to self-bill rather than through the umbrella.
  3. If you have already started the process of closing down the company by submitting a for DS01 but now want to keep the company then we need to put a stop to the close down.

As the intention is still for this legislation to go ahead it gives us further time to work with you in being tax efficient with the closure of your company should you still decide that is what you want to do.

For those who had clients that had a blanket ‘you are caught and must use an umbrella approach’ it gives you time to find a more contractor friendly client.

Of course depending on what your skill set is with a number of sectors being hit hard by COVID-19 there maybe a number of contractors looking for similar positions.

Get in touch

If you have any queries on this or any other matters relating to the new IR35 legislation or COVID-19, please get in touch on 01903 234094.