The government has announced that the extension of IR35 to medium and large companies in the private sector is being postponed by a year, to 6 April 2021.
The IR35 tax rules are aimed at making sure that where a contractor who provides their services through an intermediary (often their own limited company) would be considered to be an employee if that intermediary were not used, that contractor is subject to broadly the same tax and National Insurance contributions as employees.
Chief secretary to the Treasury Steve Barclay announced last night: “This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.” He further added “This is a deferral and not a cancellation, and the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly.”
It’s prudent to note the Off Payroll Rules are not going away this merely assists businesses in providing them with more time to ensure they have compliant and effective procedures in place.
For more information on how this deferment effects your business and/or your clients and how Peach Law’s Legal Team can assist your business please contact Peach Law on 0161 478 3800.