IR35 Reforms Delayed due to COVID-19
Due to the ongoing COVID-19 crisis, HMRC has delayed the implementation of the new off-payroll working rules (IR35) that were to begin on 6 April. The changes to IR35 for the private sector will now begin on 6 April 2021 to help workers and businesses during this crucial time period.
The delay of the reforms is part of a larger economic response package for COVID-19. The government wants to reform the way private sector organisations determine the tax status for contractors performing the same duties as an employee so that there is equity in employment taxes paid. The changes have already been implemented in the public sector, but the new rules for private sector were scheduled for this year.
Because of the ongoing health crisis and shelter in place orders posed by COVID-19, the government recognises the IR35 changes would have a serious impact on organisations struggling to continue business operations over the next several weeks. The delay will give companies more time to manage the changes associated with IR35 and comply with the new regulations.
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