IR35 Private Sector Reforms Delayed Until April 2020

Today the Chancellor confirmed that the extension of last year’s reforms to IR35 will not be extended to the private sector until April 2020. This decision was based on the consultation process and representations from MPs. From April 2020, responsibility ‘for operating the off-payroll working rules will move from individuals to the organisation, agency or other third party engaging the worker’ (para 3.8). The reforms would eventually affect only ‘medium and large’ businesses without providing a definition. For small businesses it is presumed that the existing Chapter 8 IR35 rules will continue.

This is welcome news for professional contractors who rightly feared that the haphazard and ill-conceived implementation of the reforms to the public sector would create chaos in the private sector and lead to reduced pay. The Law Place Limited’s director, Martyn Valentine, has assisted in research with ContractorCalculator which identified serious issues with HM Revenue & Customs’ CEST tool and it is hoped that the delay will allow for HM Revenue & Customs to see sense and reconsider its approach to assessing employment status.

The delay creates an opportunity to lobby the government to abolish the reforms and avoid creating another burden for the private sector. Implementation of the reforms will involve significant expenditure on training, especially for HR departments which tend to have little idea as to the distinction between a genuinely self-employed professional contractor and an agency worker.

Please contact The Law Place Limited on 07788 773871 or for more information.


More Posts

NEVER Buy Tax-Safe IR35 Insurance

Unfortunately, some unscrupulous recruiters are requiring contractors to buy IR35 tax insurance for engagements where the client is within the scope of the off-payroll legislation.