IR35 and off-payroll working changes postponed for a year due to COVID-19

The government’s postponement of the implementation of changes in IR35 legislation may have gone slightly under the radar but Chief Treasury Secretary Steve Barclay has announced that the implementation of new tax rules for off-payroll workers would be pushed back by one year.

The rules, which ensure two people sitting side by side doing the same work for the same employer are taxed in the same way, will now come into effect on 6 April 2021 instead of 6 April this year.

He confirmed that the decision was “a deferral, not a cancellation, and the government remains committed to reintroducing this policy”.

The new introduction date will be legislated in the upcoming Finance Bill.

One result of the postponed start date will mean that Personal Service Companies (PSCs) will be able to pay Statutory Sick Pay and claim tax relief for their costs throughout 2020-21.

We will continue to keep up to date with any changes to the 2020 Budget, following the coronavirus outbreak, and should you wish for any advice on the implications, do get in touch.