18th March, 2020
As some may be aware, in the efforts to support our economy during the coronavirus COVID-19 pandemic the Chancellor of the Exchequer announced last night a number of additions and further support to supplement the financial relief announced during ‘Budget 20’. Amongst these was a postponement of the reforms due to be made to the IR35 ‘Intermediaries’ legislation until April 2021. This decision was made to ease the financial and logistical pressures on contractors in this uncertain climate, in addition to allowing businesses to focus on operating safely and productively over the coming months.
What this means for Contractors is that there will no required change to their operations in April, as was otherwise anticipated. The ‘old’ rules for IR35 will remain in place until 2021, where it is the responsibility of the PSC to determine their tax status and ensure the required taxes are correctly paid to HMRC. Similarly, businesses will no longer have a requirement to conduct these reviews, or take any tax responsibility until next year.
The message we are pushing at Orion is that the measures taken by the Chancellor are warmly welcomed and we believe it is the right step to take at this stage, to provide additional financial support for businesses and contract workers during this pandemic. With that said, we would caution that this is a postponement, and not a cancellation. We have been heavily supporting a number of our clients in ensuring they met their legal obligations ahead of this legislation reform, and thankfully with this postponement, it will allow us to continue to support others over the coming months. With this postponement, we have been given an additional notice period in which to put all the measures in place to allow for a positive outcome for both businesses and contractors, and we at Orion are on hand to assist in accomplishing this.