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IR35 rules change delayed

Source: HM Treasury | | 17/03/2020

The Chief Secretary of the Treasury, Steve Barclay, made an unexpected announcement to parliament on the night of 17 March 2020. The announcement confirmed that the government are postponing the roll-out of IR35 measures to the private sector that would have affected the tax status of many incorporated contractors across the UK.

This a welcome change as it will defer much disruption in this sector until the worst aspects of the COVID-19 outbreak have passed. The new rules are now delayed and will come into effect from 6 April 2021, a year later than planned.

The Chief Secretary of the Treasury said that:

'This is a deferral in response to the ongoing spread of COVID-19 to help businesses and individuals. 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.'

The announcement of these changes will unfortunately come too late for some independent contractors whose large company clients may have already made changes in advance of the expected introduction of the new rules. These changes were expected to raise over £1.1bn for the public purse in 2020-21.

 

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McAllisters is a partnership trading from Paxton House, 11 Woodside Crescent, Glasgow providing accountancy and tax services and general business advice and is a member of ICAS (Registration No 0342) and an FCA exempt professional firm (No 301235). Its VAT number is 261 3019 94

McAllisters (Scotland) Ltd is a related business providing tax and business advisory services to McAllisters and its clients. McAllisters (Scotland) Ltd is registered in Scotland (Registration number SC146856). Its VAT number is 624 0564 62.

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