Government Announces 12-Month IR35 Off-Payroll Delay
Mar 18, 2020
Government Announces 12-Month IR35 Off-Payroll Delay
Mar 18, 2020

The Government has announced a last-minute postponement to the implementation of the Off-Payroll Tax to the private sector in light of the recent Covid-19 outbreak, with the legislation now due to be reintroduced in April 2021.

The decision was taken following significant pressure from contractors and campaigners – and indeed from within the House of Lords – who warned that the inevitable loss of work due to the virus for contractors deemed ‘inside IR35’ and effectively forced into ‘zero rights employment’ would prove catastrophic.

“This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals,” announced Chief Secretary to the Treasury, Steve Barclay MP to the House of Commons.

“This is a deferral and 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 amount of tax as those employed directly.”

Reaction: Delay Presents Opportunity to Overhaul Off-Payroll

Though Government has stated its intentions to legislate next year, contractors, clients and industry stakeholders will no doubt welcome the valuable time granted by the tragic circumstances. The announcement presents significant scope for greater consideration of the ill-considered measures, and further discussion over the alignment of employment status for tax and employment rights purposes, to combat the issue of ‘zero rights employment’ that Off-Payroll threatens to escalate.

“We warmly welcome the announcement that the Government has seen sense and delayed the damaging IR35 Off-Payroll Tax roll-out for a year,” says ContractorCalculator CEO Dave Chaplin. “With contractors facing the prospect of losing work with no sick pay, it was clearly the right and sensible thing to do.We thank our 2,600 campaigners for their excellent work, and we thank all the MPs who raised their concerns with the Treasury and opposed the flawed policy.

“We now must keep pushing for changes to outlaw the disgrace that is ‘zero rights employment’, and to make it illegal for firms to push employer’s taxation onto contractors. We also must push for the genuine review of IR35 legislation promised by the previous Chancellor, as part of the Conservatives’ planned review into self-employment.”

Chaplin adds: “Over the next year, it’s time to finally overhaul the discredited IR35 legislation, which everyone knows doesn’t work. Instead, we must come up with a way to properly recognise contracting and freelancing in the tax system and ensure people are either classed as self-employed or as employees with full rights and benefits”.

(SOURCE: contractorcalculator.co.uk)

Our expert IT recruitment consultants are here to take the pressure off you when recruiting someone new, permanent or contract. We liaise with candidates with the utmost care to ensure that their candidate experience is a positive one. Call us on 0207 788 6600 and let us help you Recruit Someone Worth Recruiting.

Related Articles

It’s Time to Talk About Quiet Firing

It’s Time to Talk About Quiet Firing

‘Quiet firing’ – are you guilty of it? Could it be the cause of your recent resignations? The internet is currently awash with people talking about ‘quiet quitting’. But, it can actually go both ways.

read more
How to Attract IT Talent Without Increasing Salaries

How to Attract IT Talent Without Increasing Salaries

The race to attract IT talent is on! But if you are a company with a smaller budget, paying an increased salary is not always possible. Plus, with the cost of running a business increasing on what seems like a weekly basis, budget pressures are being seen across the board. But it isn’t all bad news. There are ways that you can still attract IT talent without increasing your salaries.

read more
How to Write the Perfect IT Job Description

How to Write the Perfect IT Job Description

Not only should each employee have a clear job description as part of the HR process, crafting the perfect job description can actually help you to secure the best talent.  But it’s not just that! A poor job description, or none at all could actually be preventing you from hiring the best IT talent.

read more
UK Report on Jobs – August 2022

UK Report on Jobs – August 2022

Softer expansion in overall recruitment activity, vacancy growth dups to a 16-month low, availability of candidates falls at softer, but still sharp rate, and starting pay inflation eases only slightly. This and more in our report on jobs.

read more
Why You Still Need to be Offering Hybrid Working

Why You Still Need to be Offering Hybrid Working

When it comes to attracting candidates, the benefits of offering hybrid working are something you should consider. As we all return to spending more time in the office, is it necessary to have your team on site for 5 days? We appreciate that some roles in IT are hard to perform remotely. However, it still seems that most candidates are looking for flexibility and some for of hybrid working.

read more
UK Report on Jobs – July 2022

UK Report on Jobs – July 2022

A notable slowdown in permanent placement growth; softest increase in vacancies since March 2021; steeper reduction in overall candidate availability, and pay pressures moderate slightly, bur remain sharp. This and more in our report on jobs.

read more