The Off-Payroll (IR35) Reform Delayed Until April 2021

The off-payroll reforms to IR35 in the private sector have now been delayed by 12 months due to the coronavirus pandemic.
The legislation will now be reintroduced in April 2021. This is a welcome decision in light of the worrying health and economic challenges we now face, but we must stress that it has been made clear that this is only a delay and not a cancellation.

What’s happening?

1

The changes will happen on April 6, 2021, not April 6, 2020, in the private sector.

2

Status Determination Statements done to date will have no legal status – these will need to be done on the contracts and working practices in place in April 2021.

3

HMRC does not intend to pay any attention to SDSs done to date when considering if a contractor is currently inside or outside (though we recommend waiting for some written confirmation of this).

4

Contractors who have been told not to use their PSC, or that they are ‘inside IR35’ on the new rules, should speak to their agencies (and possibly end-clients) to see what the situation is now.

5

Contractors using PSCs in the private sector should apply the ‘old IR35’ rules (Chapter 8) for the 20/21 tax year as they do today. 

Contractors who have been told not to use their PSC, or that they are ‘inside’ on the new rules should speak to their agencies (and possibly end-clients) to see what the situation is now.

With the delay coming so late in the day, it is likely that many end-clients will have already set in motion new engagement practices that they are now unable or unwilling to restructure in the immediate future.

Needless to say, we at Clever Accounts will support contractors in any way possible through either our Umbrella engagement option or via our accountancy services.

Over the next few days, we will be making contact with all our contractors to discuss this matter further and determine how best to move forwards.
If you have any queries in the meantime, please do contact us.

Posted by Editorial