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IR35 reforms to be delayed for a year

A 1-year delay to the IR35 reforms was announced by the Chief treasury secretary, Steve Barclay, last night at the Budget debate in the House of Commons. The IR35 reform will now come into effect on 6th April as part of a broad package of measures taken by the Treasury to protect the economy from the coronavirus outbreak.

Barclay confirmed the decision was “a deferral, not a cancellation” and the government remains committed to the introduction of the changes, which will see a clamp down on tax avoidance by targeting contractors for companies who are, in practice, providing the same service as employees.

Seb Maley, CEO of Qdos, our IR35 partner commented on the decision saying that the government have “seen sense”. The challenges of the current economic climate could endanger hundreds of thousands of contractor’s livelihoods if the tax changes were to be rolled on out time and the delayed deadline gives private sector firms vital time to prepare for the reform.

The decision to delay the IR35 reform was announced among a £330 billion financial package to support the UK economy during such unprecedented times, which includes business rate holiday, emergency loans for companies and financial assistant to airlines.

At X4 Group, we recognise the relief this will bring contractors across the country and the frustration that this may bring for businesses who had reservations against the initial reforms. If you’d like to speak to a member of our Compliance team, please get in touch by emailing compliance@x4group.co.uk.