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IR35 private sector reforms delayed

IR35 private sector reforms to be delayed until 2021. The government has announced the one year delay to the off payroll working rules amid concerns of the covid-19 pandemic.

Plans were announced at the end of the parliamentary debate on the Budget speech.

“The government is postponing the reforms to the off payroll working rules- IR35- from April 2020 to 6th April 2021”.

Steve Barclay Chief secretary to the Treasury

This is a deferral not a cancellation. The government remains committed to introducing this policy to ensure people working through their own limited companies pay the same amount of tax as direct employees.

Responsibility for determining a contractor’s employment status was transferred from the individual to the organisation in 2017 for those working in the public sector. The plans for the private sector to follow suit have been highly controversial. With claims of rules being too complex and concerns that the HMRC online checking tool (CEST) having flaws.

This delay is part of the governments covid-19 response plan, brought in to support businesses and individuals.

Read more on the controversial IR35 reforms now due April 2021 here.