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IR35 reforms postponed

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Following the current issues in the wake of Covid–19, the Government has announced that the reforms to IR35/off-payroll working rules will now be postponed by a year (from 6 April 2020 to 6 April 2021).

What is IR35?

The IR35/off-payroll working rules are in place to ensure that where a worker (sometimes known as a contractor) provides services through an intermediary (usually a limited company), they broadly follow the same tax and National Insurance rules as employees would otherwise do as if the intermediary were not used.

What are the proposed changes?

Before the proposed changes, if you were a worker and your client was in the private sector, it was the intermediary’s responsibility to decide the worker’s employment status for each contract.

Following the changes, it was proposed that medium and large private sector clients would be responsible for deciding if the rules apply, as is the case already with public sector clients.

If the worker were to provide services to a small client in the private sector, then the worker’s intermediary would still remain responsible for deciding the worker’s employment status.

Why have they been postponed?

The Government has announced the postponement in light of the coronavirus pandemic in order to help businesses and individuals, but it insists that it will still go ahead as planned from 6 April 2021.

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