During yesterday’s Budget debate, it was confirmed that the IR35 tax reforms would be delayed to April 2021.
IR35, which came into effect in 2000, was introduced to tackle contractors working as disguised employees in Limited companies in order to take advantage of tax efficiencies. The proposed reforms were to put the onus on employers to determine the tax status of contractors.
The delay is part of the Government’s emergency measures to protect the economy during the current Coronavirus pandemic.
The delay is an important step towards damage limitation and is welcome news for many employment agencies and self-employed businesses who may already be facing the reality of income loss in the current pandemic. Although this delay is good news, it has been made clear that it is not a scrapping of the legislation. If you believe you will be affected, you should use the time to prepare – understand exactly how you might be affected and how your income might be impacted.
If you would like to discuss the implications further, please contact your relationship principal or call us on 0161 905 1616.