- 20th March 2020
- Posted by: team-glow
- Category: Tax
IR35: What’s changed?
Over the last six months, many businesses who use contractors/freelancers, as well as the individuals themselves, have been under increased pressure to review their current off-payroll working agreements due to the introduction of new IR35 laws.
However, Chief Treasury Secretary Steve Barclay announced 16TH March that the IR35 tax reforms would now be pushed back by one year to April 2021, which has raised concern for those who have already implemented changes.
Whilst many state that it is too late, the government has announced that the move is part of a broad package of measures the Treasury has announced to protect the economy from the coronavirus outbreak.
So, what does this mean?
Due to the new rules now being postponed, businesses who were significantly impacted by IR35 can delay considerations required to comply with the new rules. This will provide them with breathing space to deal with COVID-19, which is significantly escalating.
Furthermore, contractors who would have been affected by IR35 laws would have likely seen a significant reduction in take home pay, assuming day rates were the same. However, these workers will now possible be able to continue to work under the existing regime without the undue uncertainty, especially when contractors and their families may be impacted by the virus.
Why is this a positive move?
Due to the current COVID-19 pandemic, many freelancers and contractors have found themselves in a position where workloads have been ended or significantly reduced.
The recent announcements now mean they are able to accept one-off contracts for work both during the pandemic if required, and most certainly after pandemic when businesses are urgently looking to rebuild following sever disruption.
If you would like clarification on any of the points we’ve just mentioned, please feel free to contact us here https://shenward.com/contact-us/.