One year delay to the extension of the IR35 rules for the private sector

United Kingdom

In the midst of the Coronavirus crisis, the Government has announced that it will delay the implementation of the reforms to the IR35 rules from 6 April 2020 to 6 April 2021, with a view to easing the administrative burden on those businesses which would be affected by having to implement the new rules at this difficult time.

Introduced around two decades ago, IR35 is an anti-tax avoidance rule that applies to contractors and freelance workers who are not self-employed in accordance with HMRC’s definition.

In the 2018 Budget, the then Chancellor Philip Hammond announced the extension of the application of IR35 rules to large and medium-sized businesses in the private sector. Since then, the proposal has come under a great deal of scrutiny by individuals and business. Please see earlier Law Now’s here for further detail on the Government’s initial proposals.

At a time where the whole economy is expected to suffer unforeseen hardship caused by the Coronavirus crisis, this change is no doubt a welcome one for contractors and end-users alike.