The Government announced yesterday, Tuesday 17 March 2020, that the implementation of the reforms to the IR35 legislation is postponed until 6 April 2021.
The purpose of the reforms is to ensure that people working like employees but through their own service company pay broadly the same tax as people employed directly by a company. The detail of the legislation is complex and the implementation of the reforms will be administratively burdensome on all those affected.
For more detail on the IR35 reforms please see our previous blog.
The Government has postponed the implementation of the reforms as part of a package of measures intended to alleviate pressure on businesses caused by Covid-19. The Government emphasises that the postponement is not a cancellation and that it remains committed to reintroducing the policy in 2021.
This will be some comfort to businesses, many of which were not sufficiently prepared for the April 2020 deadline, and which are likely pre-occupied by other challenges posed by Covid-19.
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