Off-Payroll Working (IR35) Rule Changes Deferred Until 2021

Changes to Off-Payroll Working rules (IR35) have been deferred as a result of the Coronavirus outbreak.

Dated: 18 March 2020  Author: James Hunt, Employment Services Senior Manager 

The IR35 tax reforms, which will have a significant impact on many private sector businesses, have been delayed for a year and will now take effect from April 6, 2021.

Chief Treasury Steve Barclay announced the changes in the House of Commons on Tuesday 17^th March and the deferment is set to be confirmed by HMRC, just a week after  implementation at April 6, 2020 was confirmed in Chancellor Rishi Sunak’s budget.

Your business could be affected by the Off Payroll Working tax reforms if: 

• You use workers who are not on your payroll
• You use temporary workers through recruitment agencies.

Although there is now more preparation time for the IR35 changes, if your business could be affected by the rules, we recommend you take professional advice to reduce the risk of tax underpayments, interest charges and penalties.

At Dains, we can help to make sure you are prepared for these changes, ensure compliance and minimise cost.

James Hunt, Employment Services Senior Manager at Dains, said: “The Government has announced that the impending IR35 changes have been postponed until April 2021. This is likely an action driven by the disruption all businesses are experiencing due to the Coronavirus pandemic.

“Whilst it is generally a positive step to support businesses, it will be frustrating for those who had put time and effort into planning for the change and have already communicated with contractors.

“Given that this is only a postponement, businesses should ensure they make the most of the extended preparation time, to ensure they are adequately prepared for what remains a substantial change to the engagement of workers not paid through the payroll.

“Dains remains committed to providing our clients with support, in employment tax and all other areas, that is proactive, commercially driven, and particularly relevant to preparing for the months ahead.”