HMRC delays
introduction of off-payroll rules to private sector
HMRC has delayed the
introduction of off-payroll rules to the private sector as part of its measures
to support businesses through the coronavirus (COVID-19) pandemic.
The reforms will shift the
responsibility for assessing employment status to the organisations employing
individuals. The rules would have applied to contractors working for medium and
large organisations in the private sector, and were due to come into effect on
6 April. Steve Barclay, Chief Secretary to the Treasury, stressed that the
introduction of the rules has simply been delayed, rather than cancelled. The
rules will now take effect on 6 April 2021.
In a statement, HMRC said:
‘This is part of additional support for businesses and individuals to deal with
the economic impacts of COVID-19.
‘This means that the
different rules that exist for inside and outside the public sector will
continue to apply until 6 April 2021.’
The
introduction of the off-payroll rules to the private sector, which are known as
IR35 and have applied to the public sector since 2017, was reviewed earlier
this year. The changes were due to go ahead alongside the implementation of
measures to support affected businesses and individuals.
Commenting on the delay,
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.
‘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.’