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Government announces shock IR35 reforms delay

Author: Michael Meyer

Published date: 2020/03

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The government has sensationally delayed the off-payroll work rules (IR35) changes by 12 months, pushing it back to April 2021. With huge pressure from industry leading figures, pressure from peers and the additional stress the economy is under from the coronavirus, it left the government with no other option but to delay the changes.

Whilst good news for many, Steve Barclay, Chief Secretary to the Treasury made it clear that this wasn’t a cancellation and was very much a deferral for 12 Months. The announcement has clearly brought everybody some time, but it does leave HMRC with the option to look retrospectively at this year once we get to April 2021. They said they wouldn’t do this time….but will they say the same thing this time next year?

Whilst many contractors will have woken up this morning feeling relieved at the delay, there are a huge number of contractors who had already had their fate confirmed by companies who had already made status determinations on roles. For some, the opportunity will still be there, but for others it is too late. Those companies who made blanket determinations or said they will not engage with contractors at all will likely find themselves at the bottom of the options list for many contractors when looking for their next assignments.

So, we are technically back to a position where the intermediary is responsible for determining the IR35 status of the role. Contractors who complete full assessments on roles over the next year will no doubt provide themselves some protection from April 2021.

Coming so close to the off-payroll rule changes coming into effect will certainly have made businesses more aware of how they engage with contractors. If we take the additional year we’ve been ‘given’ to look at how we can better engage with legitimate PSC’s then in April 2021 we won’t see the huge fallout we’ve seen in the last few months.

Let’s spend the next 12 months working together to ensure that when the time eventually comes, we are all ready.