We advised, in a previous article, that the IR35 regime is scheduled to be extended to all medium and large companies in April 2020.
Over the past few months, there has been a clamour from various organisations for the Government to rethink the extension of IR35 on grounds of what some claim would be damage to the economy and thousands of individuals currently working as contractors to firms under the guise of a personal service company. The noise around IR35, and pressure from a number of MPs, led to the Government agreeing to a six week ‘review’ of the proposed changes.
So, at time of writing, it is unclear whether the changes will go ahead as planned in April, be deferred, or be significantly amended.
One change has already been announced. The off payroll rules will now apply only to payments made for services provided on or after 6 April 2020. Previously, the rules would have applied to any payments made on or after 6 April 2020, regardless of when the services were carried out. It means organisations will only need to determine whether the rules apply for contracts they plan to continue beyond 6 April 2020. The Government has stated that this change is to give firms more time to prepare yet the proposed changes have been known for over a year so this statement would appear to be a bit disingenuous. The real reason is probably more an attempt to assuage the political and business pressure.
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