The government have made the decision to delay the off-payroll reforms until April 2021.
In a shock announcement from Chief Secretary to the Treasury, Stephen Barclay MP, yesterday evening, the government have postponed the off-payroll (IR35) reforms from being implemented on the 6th April 2020 to the 6th April 2021.
The government have said that they are committed to the reforms and that this is a deferral and not a cancellation, brought in to relieve businesses and individuals as a response to the current COVID-19 pandemic.
With the deferral news being announced with less than three weeks to go until the original reform date, many businesses will have already begun implementing their IR35 reform plans and in some cases even issuing Status Determination Statements (SDS). However, we believe the news will be welcomed with open arms by many within the recruitment and contracting industry although given the uncertain circumstances it is currently hard to predict what we may see in the short-term.
We asked our Technical Commercial Manager and IR35 expert, Joanne Harris, for her thoughts:
"This deferral will come as welcome news to many across the recruitment and contracting industry. However, there are concerns that this has come too late for many businesses that have already implemented their IR35 business strategy and, in some cases, issued Status Determination Statements.
"The government have made it clear that this is a deferral, not a cancellation, brought in to help businesses and individuals in light of the current COVID-19 crisis. It will be interesting to see how the business community reacts to this change, but given the current circumstances, the inherent flexibility of the UK’s contingent workforce could be more important than ever.
"The government has also reiterated that it still remains committed to this policy and it will now come into force from 6th April 2021, so it's important that the industry doesn't lose sight of the longer-term strategy."
Other announcements made to assist businesses during this uncertain time have included emergency loans for companies, financial assistance to airlines and a business rate holiday; all of which have been included as a £330bn financial package.
As always, the team at Parasol will be on hand to support our agency partners and answer any questions you may have. Please get in touch with your account manager or visit our contact page if you have any queries we can assist with.
If you have any questions about IR35 please visit our recruiters IR35 page.