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Off-payroll working rules delayed by a year

The start date for new HMRC off-payroll tax rules has been pushed back by one year due to coronavirus.

18 March 2020

The Government announced that the reform to the off-payroll working rules that would have applied for people contracting their services to large or medium-sized organisations outside the public sector will be delayed for one year from 6 April 2020 until 6 April 2021. 

This is part of additional support for businesses and individuals to deal with the economic impacts of Covid-19. This means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021. 

This announcement is a deferral of the introduction of the reforms, not a cancellation. The Government remains committed to introducing this policy to ensure that people working like employees, but through their own limited company, pay broadly the same tax as individuals who are employed directly. 

Chief secretary to the Treasury Steve Barclay told the House of Commons last night: “I can announce that the government are postponing the reforms to the off-payroll working rules IR35 from April 2020 to 6th April 2021.”

He added: “This is a deferral in response to the ongoing spread of covid-19 to help businesses and individuals. This is a deferral, not a cancellation, and the government remain committed to reintroducing this policy to ensure that people who are working like employees, but through their own limited company, pay broadly the same tax as those employed directly.”

The new IR35 rules are designed to address perceived tax abuses associated with off-payroll working.

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