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Private sector IR35 reform delayed until April 2021

Contractors and companies welcomed the announcement on 17 March that private sector IR35 reform will be delayed until 6 April, 2021.

The news came after pressure by peers and amidst deep uncertainty for workers and businesses due to COVID-19.

IR35 delay announcement

Steve Barclay, the chief secretary to the Treasury said: “I can also announce this evening, madam deputy speaker, that the government is postponing the reforms to the off-payroll working rules, IR35, from April 2020 to the 6th April 2021.

“Government will therefore not move the original resolution tonight but will shortly table an additional resolution confirming that we will reintroduce the off-payroll working rule provisions by amending the bill, with a commencement date of 6th April 2021.”

“This is a deferral in response to the ongoing spread of COVID-19 to help businesses and individuals.

“This is a deferral, 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 tax as those employed directly.”

Reactions to IR35 delay

Keith Hall, Partner at Cardens Accountants heading up our IR35 support team said: “There’s obviously a lot in the news at the moment so this was buried away in all the details from the Chancellor’s statement on the evening of 17th March, but this is a welcome and sensible decision by the government”

“Although this change is so close to the 6th April, hopefully it will still allow people time to take action to get new working arrangements in place for the new tax year.”

Andy Chamberlain, Director of Policy at IPSE (the Association of Independent Professionals and the Self-Employed) said: “The government has done the sensible thing by delaying the changes to IR35 in the private sector.

“These changes have already undermined the incomes of many self-employed businesses across the UK. However, they would have done even more serious damage if they had gone ahead as planned.

“It is right and responsible to delay the changes to IR35 for at least a year during the Coronavirus crisis, to reduce the strain and income loss for self-employed businesses.”

Preparing for the IR35 rollout

We know that many business owners feel the news is somewhat bittersweet as they have invested huge amounts of time and financial resources to prepare for the rollout.

The private sector IR35 has been delayed by a year, but the rollout will go ahead. This means that those affected still need to prepare before April 6, 2021.

We are taking your questions and concerns regarding IR35 and will continue to offer our advice and support. Please get in touch at to discuss your situation and a member of our team will respond.

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