Twelve-Month Delay for IR35 Tax Reforms

Controversial changes to the IR35 off-payroll working rules have been shelved until April 2021, in response to the coronavirus pandemic.

The government is delaying the reforms for a year to help businesses and individuals, but says the move is 'a deferral and not a cancellation'.

The IR35 changes will make all medium and large private sector businesses in the UK responsible for establishing whether contractors who are working for them should be classed as employees for tax purposes.

On announcing the delay to the legislation, Steve Barclay, Chief Secretary to the Treasury, said, "The government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly."

The new rules are now anticipated to take effect on 6 April 2021.