Government to delay IR35 reforms until April 2021

Due to the spread of Covid-19 the government have decided to delay the IR35 reforms until April 2021. We will be quoting some experts on their thoughts on what this could mean for contractors across the United Kingdom in this incredibly worrying time. So, let us begin by informing you all what we know will come into place and what is going to happen in the coming months.

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What we know so far

Over the last few weeks, the chief treasury secretary Mr Steve Barclay has informed us that all of the reforms that were supposed to be put in place soon, will now in fact, be pushes back to the 6th of April 2021. It is important to state though, that this is a deferral and not a cancellation of the legislation that the government wishes to remain committed to reintroducing this policy next year.

We will update this article once we have some new information regarding this legislation and any update from the House of Commons, however, it might be a while before we see some form of update in regards to this.

Expert opinions

IR35 contractor

Many experts in business have come forward with their opinions on tis recent update about the IR35 legislation. Some are relieved, where as some business experts are frustrated.

Here is a quote from the CEO of Qdos, Seb Maley:

“The government has seen sense and made the right call in these unique circumstances. Given the economic challenges that lie ahead of the UK, now certainly would not have been the right time to roll out needless tax changes that endanger hundreds of thousands of contractors’ livelihoods.

“It does give private sector firms vital time to prepare for reform, which can only be a good thing for contractors. What matters now is that businesses use this time wisely.”

Here is a quote from Claire Brookes, an employment law partner at Aaron & Partners.

“Although this will come as welcome news to a huge number of employers, agencies and contractors there will also be many who believe this announcement has come far too late. Many businesses have already implemented their IR35 strategy and a significant number of contractors have already had contracts terminated.

“We have never seen a time where so many employment law changes have come into place so quickly, and we are seeing new developments each day.  It’s been positive to see that during this time employers continue to seek solutions that will provide the best outcomes for their employees and businesses working together to support the community.  It is important to reiterate that given the pace of legal change it is vital that businesses seek professional advice at this time to keep up to date.”

A quote from the CEO of inniAccounts and the founder of offpayroll has said the following:

“This will give time for the Lords review to be published, and we hope that the Treasury and HMRC listen to their recommendations before attempting to re-table this legislation for April 2021.”

FCSA chief executive, Julia Kermode, is concerned about the money that has already gone into complying with the reforms:

“We are aware through our evidence submitted to various government bodies, including the House of Lords, that some businesses have spent in excess of £700k in preparing for the private sector reforms which illustrates only the tip of the iceberg of the cost to businesses and the economy.

“I very much hope that some detailed analysis of the wider implications of this reform can be undertaken in the coming months in order to establish whether or not it should be scrapped entirely, rather than simply ploughing on in 12 months’ time.”

A quote from the CEO of ContractorCalculator has said the following:

“We would like to thank our 2600 campaigners for their excellent and tenacious work and we thank all the MPs who raised their concerns with the Treasury and opposed the flawed policy.

“We must now keep pushing for changes to outlaw the disgrace of ‘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.”

Is this a possible end to IR35 reforms?

IR35 contractors

Some experts of business believe that this might be the end of the IR35 reforms, or in fact are hoping that this is the case. Even though the government has said that this isn’t the case, some individuals are remaining hopeful.

Our Conclusion

So, as you can imagine there are a lot of people that are pleased with the movement and others that are quite skeptical. However, there is always something to look forward to and when all of this virus business is over, we might even see a rate of pay increase for contractors due to the amount of demand for work that needs doing.

We understand that a lot of people might not be too pleased with the current movement by the government and that it leaves a lot of questions. However, at the present moment in time there isn’t much else to be said in regards to this change. All we can do is hope for more information in the coming months. Which is why we are going to reiterate a point made earlier and keep updating this article with any additional information we receive or can find regarding the IR35 move.