22 May 2020 | Comment | Article by Sali Gwen Owens

UPDATED: Reforms to IR35 legislation still set to come into force in April 2021

Reforms to IR35 legislation still set to come into force in April 2021

22 May 2020

Despite widespread calls for the IR35 reforms to be delayed by at least two years in light of the ongoing economic impact of the coronavirus pandemic, businesses will be disappointed to hear that the reforms are still set to come into force in April 2021.

The reforms, which will apply to medium and large size businesses operating in the private sector, were originally set to come into force in April of this year but were delayed until next year by the government in March due to the economic pressures of coronavirus.

Notwithstanding the current period of uncertainty that many businesses will be facing, preparations for the reforms (which will shift responsibility for determining the tax status of the contractor to the engaging business) must continue to take place over the coming months.

If you need help and guidance on the introduction of IR35 in the private sector or the pressures you are currently facing as a result of the coronavirus pandemic, please contact our designated Employment & HR Services team.


19 March 2020

News that the introduction of IR35 in the private sector will be delayed by a year will give some businesses welcome relief if they have not yet completed their preparations.

They should use this additional time to make sure they’re well prepared for the change next year, whilst also having the opportunity to focus on the new challenges emerging from the Coronavirus outbreak.

Chief Treasury Secretary Steve Barclay announced on 17 March 2020 that the introduction of IR35 in the private sector will be delayed until 6 April 2021 due to the economic pressures of Coronavirus.

Steve Barclay said: “This is a deferral and not a cancellation, and the Government remained committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly.”

Businesses in the private sector that have already made changes to their contracts in preparation for the introduction of IR35 are well placed for the legislation now coming into force in April 2021.

If you need help and guidance on the introduction of IR35 in the private sector or the pressures you are currently facing as a result of the Coronavirus outbreak, please contact our designated Employment & HR Services team.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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