Government announces 12-month delay to IR35 Off-Payroll Tax roll-out

The Government has announced it will delay the roll-out of new IR35 Off-Payroll Tax rules for 12 months.

The move was announced by the chief secretary to the Treasury, Steve Barclay , in the House of Commons last night (17 March).

According to the Stop The Off-Payroll Tax, the contracting sector campaign group against the IR35 Off-Payroll Tax roll-out, the decision was taken following “significant pressure” from campaigners and contractors.

It said that groups warned that the inevitable loss of work due to Covid-19 for those contractors deemed ‘inside IR35’ and effectively forced into ‘zero rights employment’ would prove”catastrophic”.

It added that though the Government has stated its intention to legislate in April 2021, contractors, clients and industry stakeholders will welcome the announcement so that greater consideration can be given to the “ill-considered measures”.

Dave Chaplin, director of the Stop The Off-Payroll Tax campaign and CEO of ContractorCalculator said: “We warmly welcome the announcement that the Government has seen sense and delayed the damaging IR35 Off-Payroll Tax roll-out for a year.

“With contractors and freelancers facing losing work with no sick pay, it was clearly the right and sensible thing to do.”

He added: “We must now keep pushing for changes to outlaw the disgrace of ‘zero rights employment’ and to make it illegal for firms to push employer’s taxation onto contractors.

“We must also push for the genuine review of IR35 legislation promised by the previous Chancellor, as part of the Conservatives planned review into self-employment.”