As you’ll no doubt know by now, in a shock announcement on Tuesday 17th March, the Chief Secretary to the Treasury, Steve Barclay, announced the private sector IR35 reforms have been delayed until 6th April 2021 due to the Coronavirus pandemic. Mr Barclay said IR35 changes would be paused “in response to the ongoing spread of COVID-19 to help businesses and individuals”, before making it clear that “this is a deferral not a cancellation.”
Nonetheless, this announcement has been well received by contractors, given it means they will continue to administer their own IR35 status for another 12 months when working in the private sector. However, for thousands of independent workers who have been incorrectly placed inside IR35 or made to work via PAYE by their clients, many have argued this delay is too little too late and that the damage has already been done.
While an IR35 reform delay is ultimately a welcome development, the Government is facing pressure to better support contractors and the UK’s wider self-employed workforce through this period. Lobbying bodies, such as IPSE, continue to stress that the Chancellor’s commitment to pay 80% of employee’s wages up to £2,500 per month in this crisis must be extended to independent workers in some way, shape or form.
Several financial measures have been revealed already to help self-employed workers and small business owners weather the storm and get through this time of great uncertainty. And despite these challenging times, it’s vital that contractors take stock and continue to prepare for next year’s IR35 reform in order to avoid potential implications in the years to come.
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