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In response to the developing economic crisis being created by the Coronavirus pandemic, the government has announced that the controversial changes to off-payroll working rules will be delayed by 12 months to April 2021.
Less than one week after the budget confirmed that the changes to IR35 legislation were going ahead in a little under 3 weeks, Chief Secretary to the Treasury, Steve Barclay announced the delay to parliament last night.
Whilst many will welcome the delay given the economic challenges ahead, some will say it is too little too late, given many businesses and contractors have already implemented changes to their working practices that cannot easily be reversed.
Those most likely to benefit from this announcement will be those who at this late stage had not yet considered the new rules. The delay will now afford them much needed time to correctly prepare.
Chief Executive of the Contractor Co-op, Chris Mattingly, said “As an umbrella we have seen a mixed response to yesterday’s announcement. Whilst some have seen it as an opportunity to maintain the status quo, many are accepting that the safest approach is to follow the Status Determination Status issued by the hirer and are proceeding with their move to umbrella payroll.
Unless a status disagreement notice has already been issued to the hirer, I would caution any contractor who has been issued a Status Determination Statement placing them ‘Inside IR35’ to now apply their own determination of ‘Outside IR35’. This would be a very risky move and for anyone unsure of their position, we would encourage them to seek specialist advice.”
There are lessons to be learned here and companies and contractors should use this additional time to properly consider their working arrangements and where there is uncertainty with an individual’s employment status for tax, work together to implement a solution before April 2021.
For anyone requiring guidance on the off-payroll working reforms we are here to help. Either call us on 020 3468 0009 or send a message to info@contractor.coop.