The government has postponed the introduction of the planned changes to the controversial IR35 legislation, which implements heavier tax burdens on freelancers and the self-employed. The new rules will now come into force on 6 April 2021, as opposed to the same date in 2020.
Speaking to the House of Commons on the evening of 17 March, chief secretary to the Treasury Steve Barclay (pictured) said: “The government is postponing the reforms to the off-payroll working rules, IR35, from 6 April 2020 to 6 April 2021.”
Addressing the Commons, Barclay said the suspension is in response to the ongoing spread of Covid19 to help businesses and individuals. He said: “This is a deferral, not a cancellation, and the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company, pay broadly the same tax as those employed directly,” he added.
Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed (IPSE) said the government has done “the sensible thing” by delaying the changes to IR35 in the private sector.
In a statement released late Tuesday evening, Chamberlain said: “These changes have already undermined the incomes of many self-employed businesses across the UK. However, they would have done even more serious damage if they had gone ahead as planned.
“It is right and responsible to delay the changes to IR35 for at least a year during the coronavirus [Covid19] crisis, to reduce the strain and income loss for self-employed businesses.
However, Chamberlain has reaffirmed that more needs to be done to support self-employed businesses and has called for an emergency Income Protection Fund. He said: “This is a sensible step to limit the damage to self-employed businesses in this grave and unprecedented situation, but we also urge the government to do more. It must create an emergency Income Protection Fund to keep the UK’s crucial self-employed businesses afloat.”