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IR35 reform will definitely arrive in 2021 after MPs reject delay

“No turning back” as 2021 rollout confirmed as part of Finance Bill 

IR35 reform in the private sector will certainly be enforced on 6th April 2021, after MPs voted against delaying the controversial changes until the 2023/24 tax year in Parliament on 1st July.

At the Report Stage of the Finance Bill, an amendment tabled by David Davis MP that proposed postponing the reform for two years gained significant support but wasn’t passed. The 254 MPs who voted in favour of ‘Amendment 20’ were overruled by the 317 who rejected it.

As a result, the 2021 rollout has been accepted as part of the Finance Bill, which will soon be read for a third and final time before travelling through the House of Lords. It will then progress to Royal Assent where it will be agreed as law. 

While there are clearly many MPs other than David Davis concerned about the changes, including acting Liberal Democrat leader, Sir Ed Davey and the SNP’s outspoken Alison Thewliss, it is thought that Government whips exercised their influence in this debate. This didn’t go unnoticed, with Ed Davey slamming the “many Tory MPs” for “ignoring their constituents and doing what they were told to by Government whips.” 

IR35 expert says “no turning back now”

This latest development is significant because it means “IR35 reform in the private sector has effectively now been signed off and will arrive in April 2021”, explained Qdos CEO, Seb Maley, who went on to say: “Despite concerns raised by a number of MPs, who rightly exposed the flaws of this legislation and made it clear they do not believe changes are necessary, it seems there’s no turning back now.”

Maley was also critical of the Government for going ahead with “short-sighted” reform which, “if mismanaged poses a risk not just to contractors but to hiring organisations and recruiters.”

Private sector urged to prepare

With reform now confirmed as part of the Finance Bill, Qdos is one of a number of IR35 specialists that immediately called on private sector businesses to step up their preparations. CEO, Seb Maley, said the ball is in their court: “It’s up to private sector firms to prepare for the changes, which can be managed with the right approach. However, work must start immediately – I can’t stress enough how important this is. For companies to compliantly engage genuine contractors beyond April 2021, they must avoid risk-averse policy decisions and instead prioritise fair and considered IR35 status assessments.”

IPSE will continue to “press the case”

Despite the apparent certainty regarding the introduction of IR35 changes next year, IR35-lobbying body, IPSE released a statement in which it said it will continue to “press the case” to the Government regardless: 

The UK is now facing one of the most severe economic crises on record. We will press the case that now is the worst time to push the damaging changes to IR35 onto an already under-supported and struggling freelance sector. The passage of this Finance Bill and its changes to IR35 legislation is disappointing and a setback. However, it is part of a much larger discussion about creating a modern tax system that works for self-employed people. Rest assured that we are already pressing ahead in this wider discussion, working hard to get a fair deal for freelancers.”

By Contractor Weekly

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7 thoughts on “IR35 reform will definitely arrive in 2021 after MPs reject delay”

  1. Zero Rights Technical Employee

    Well it is all over for the freelance world.

    IR35 the Zero Rights Employee legislation has arrived.

    Queue up for your Universal Credit claims.

    I am seeing inside roles at £150 to £200 which equates to about £18k job if it was for 12 months.

    What about all the offshore visas with 500,000 IT people unemployed is it not time to block all overseas visas?

    Oh wait Mr Sunak father in law, ah well

  2. Tory 1980 Pit Closures

    1980’s we watched the pits closed because of cheap polish coal

    2020 we see the IT sector closed because of cheap Indian labour.

    Is this the new Tory 40 year cycle?

    Who will buy all the insurances and use the banks and pension companies when the worker actually has no money.

    Tory party need to remember Rampant Capitalism only works IF people have the money to buy your crappy service.

    Universal Credit the new norm, and I always thought it was just the Labour part y that wanted everyone on benefits.

  3. Graham

    More significant than the tax, the inability to offset expenses will have a dramatic impact on the ability to take work that requires significant commuting and overnight stays. Clients will realise this soon enough as the standard of candidates available to them drops significantly.

  4. XY

    Another victory for big consultancy lobbying.

    Rishi’s father in law will be pleased with him. Co-founder of Infosys, second largest Indian consultancy. Who needs lobbying with that kind of access.

  5. Anon

    Well i bit the bullet and accepted a permy role to ride out the covid epidemic. HMRC will lose around 15k in overall revenue from me working as a freelancer and so have already scored an-own goal…..This is the bigger picture that nobody at th erevenue is considering, along with the flexibility required by businesses to start and change projects (hire and fire at will) at short notice (critical in a downturned economy?!) that will see the UK crippled….I’ll wait for teh U-Turn and re-enter the market at the appropriate time……Madness, absolute madness…

  6. Jon

    Not in one full time job did I get as much as 1 hr of training. Every full-time job I ever had was “hit the ground running”, constant bulling, undue pressure, ridiculous deadlines, regular 6 and 7 day weeks and a salary just good enough to exist and get to work.
    Engineers are not regarded as professionals by most managers, most companies just think engineers sit behind a computer and do manufacturing drawings, the idea things need to be invented, researched & developed is totally alien to them along with the processes and skills required to develop a product.
    My way of dealing with how shit Engineering in the UK has become was to have my own design consultancy. I could work as a professional design engineer, fund myself through learning courses and set aside time for continuous education, buy the software I deemed necessary and also carry out my own R&D into autonomous walking robotics with a view to developing my company in this direction.
    Now it’s all gone wrong, even HR and agencies think mechanical engineers are unskilled, I was rejected from one contract as a Mech. Engineer with exp. in automation/robotics because it required accuracies of less than 1mm! Had another agency contact me as I have an MSc in astronautics engineering, they though I might like to be a jetwash engineer (cleaning toilets), job came with overalls and a van.

    This IR35 is little more than legalised slavery, engineering is dead in the UK now, I know if I stay in this country I will have to give up on all my dreams of developing robotics and will most probably get stuck in a full time job being treated badly on a low wage having to work extra hours just to keep my job.
    I am wondering because of this IR35 regulation if I might even have grounds to apply for asylum somewhere in the EU? I feel it’s a human rights issue

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