Extension of IR35 postponed

Posted on: March 19th, 2020

The government announced on Tuesday night 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 were designed to ensure that any contractor providing their services through an intermediary (usually their own limited company), who would otherwise be considered to be an employee if that intermediary were not used, end up paying broadly the same tax and National Insurance contributions as employees.

The rules were controversial and had faced a lot of criticism from some sectors. However, the government have now decided to delay them as a result of the coronavirus challenge faced by business.

Even though many businesses will have done a lot of work to be prepared for the original implementation date of 6 April 2020 this is likely to come as welcome relief and enable businesses to revisit the topic later in the year when hopefully things have settled down.

If you have any questions or need assistance with either IR35 or the challenges of coronavirus, please get in touch with our Employment team or fill in the enquiry form below.

With daily updates from the Government regarding the coronavirus, we have put together guidance for businesses to help mitigate risk and avoid disruption – read our guide here.