Extension of IR35 postponed
The Government has announced that the extension of IR35 to medium and large companies in the private sector is being postponed by a year, to 6 April 2021.
What is IR35?
IR35 is a tax reform that was unveiled in 1999 by the UK Tax Authorities. The latest regulation change will force medium and large businesses in the UK to set the tax status of their contractors and freelancers. Previously, this was set by the contractors themselves. Contractors found to be within the scope of the legislation (i.e. inside IR35) would have had to pay the same tax and national insurance contributions as full-time employees, despite not receiving the same level of benefits (including holiday pay, sick pay, pension)
The rollout of changes to private sector off-payroll rules has been delayed as part of the government’s response to the Coronavirus outbreak.
It is said that the delay will allow businesses that have not yet adequately prepared for the change enough time to take action.