IR35 delayed for a year

On 17 March, the UK Government announced that the changes to the off-payroll working rules (known as IR35) will be delayed for one year from 6th April 2020 until 6 April 2021.

This is part of the additional support measures for businesses and individuals to deal with the economic impacts of Covid-19.

The Government have made it clear this is a deferral, not a cancellation, and they remain committed to introducing this policy to ensure that people working like employees through a limited company (typically a personal services company (PSC)), pay broadly the same tax as individuals who are employed directly.

 

What does this mean for me?

A deferral of the changes is undoubtedly welcome as businesses get ready to weather the storm ahead, and the economic downturn.

Until 6 April 2021, the current off-payroll working rules will remain in force. This means that for Varios operating through a PSC in the private sector, it will remain your responsibility to assess your IR35 position, and properly account for tax through your PSC.

For Varios re-engaged through a PAYE route, it is possible that client organisations will wish to maintain those arrangements, whether for convenience, to avoid unpicking previously communicated policy decisions, or duplicating efforts in the run up to April 2021.

If day rates have been re-negotiated on a PAYE basis, where applicable reverting back to a PSC engagement will involve a reinstatement of original day rates.

The Vario team are on hand to answer any individual queries you may have– please do contact our dedicated IR35 project team VarioIR35@pinsentmasons.com, or speak to your usual Vario team contact. We are here to help!