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IR35 changes postponed

So, coronavirus has achieved in days what months of rational argument didn’t: it’s been announced that the “off-payroll working” (aka IR35) changes that were to be brought in from 6 April 2020 will be deferred until 6 April 2021.

In theory, it’s good news; in these difficult times it allows contractors both the cashflow and absolute advantages of working via a company.  But in practice, it probably makes little difference.

For one thing, many engagers had already reacted to the changes by declaring that in future all workers will be “on the books” as employees and it would be too late now to reverse that decision even if the engagers were not focussed on more mission-critical matters.  For another, many contractors have, in anticipation of the changes, already taken steps to wind up their companies; and it is unlikely to be worthwhile to form a new company to undertake just one year’s uncertain trading.  And, of course, work is rapidly drying up whether for contractors or employees.

Ironically, the homeworking and flexible hours that are now being imposed by the COVID-19 crisis are features that would have tended to support the argument that IR35 did not apply at all!

For more information, please get in touch with your usual BKL contact or use our enquiry form. We also have a range of guidance and resources available via our website’s coronavirus page.

 

Anthony Newgrosh

Partner, Head of Business Tax

T +44 (0)20 8922 9144
E anthony.newgrosh@bkl.co.uk

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