Speaking in the House of Commons, Chief Secretary to the Treasury, Steve Barclay, announced that given the circumstances and Coronavirus pandemic, HMRC would delay the roll-out of the changes to IR35 in the private sector for a year.
This comes alongside a tranche of economic measures aimed at supporting businesses in these emergency times.
Lobby groups have been pressing for a delay or cancellation of these IR35 controversial measures for some times - but none could have predicted the circumstances of the move.
The Government's decision has been welcomed by freelancer groups and small businesses
IPSE - 'Sensible thing
Freelancer group, IPSE, said the Government had 'done the sensible thing' by delaying.
Andy Chamberlain from IPSE said: “The Government has done the sensible thing by delaying the changes to IR35 in the private sector.
“These changes have already undermined the incomes of many self-employed businesses across the UK. However, they would have done even more serious damage if they had gone ahead as planned.
"It is right and responsible to delay the changes to IR35 for at least a year during the Coronavirus crisis, to reduce the strain and income loss for self-employed businesses.
“This is a sensible step to limit the damage to self-employed businesses in this grave and unprecedented situation, but we also urge the Government to do more. It must create an emergency Income Protection Fund to keep the UK’s crucial self-employed businesses afloat.”
Qdos - 'right call'
Tax specialists, Qdos, praised the Government for making the 'right call. at a time of crisis.
Qdos CEO, Seb Maley, said: “The Government has seen sense and made the right call in these unique circumstances. Given the economic challenges that lie ahead of the UK, now certainly would not have been the right time to roll out needless tax changes that endanger hundreds of thousands of contractors’ livelihoods.
“That said, this is only a delay, albeit a very welcome one. It does, however, give private sector firms vital time to prepare for reform, which can only be a good thing for contractors. What matters now is that businesses use this time wisely.”
Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
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Susie Hughes © Shout99 2020