The UK government has delayed the introduction of IR35 reforms until 2021 in an attempt to alleviate pressure on businesses and individuals amid the global coronavirus pandemic. In a time of increasing uncertainty for self-employed and contract workers, this news may come as a relief.
Although the IR35 legislation first came out in April 2000, with the intention of preventing workers from declaring themselves as freelance in order to pay less tax, it was due to be rolled out to the private sector on 6th April this year.
Speaking to the House of Commons this week, Steve Barclay, the chief secretary to the Treasury, confirmed the reforms would now be postponed until April 2021: “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 remains committed to reintroducing this policy to ensure people working like employees, but through their own limited company, pay the same tax as those employed directly.”
"This is a deferral, not a cancellation"
SuperyachtNews spoke to James Ward, managing director of Marine Resources about the delay and the effect it will have on the maritime industry. “The reform was hugely controversial to start with and received a lot of pushback. It was really going to force people to have to work through PAYE, which then really opens people up to zero-hour contracts.
“This is good - what the government has done but it hasn’t gone away. We have some companies still going ahead and enforcing people to work through PAYE as they’ve already had to change so many internal processes their end.
“What has been positive however, is that some companies have instantly extended their current contracts, even in the current climate, meaning contractors know that they will have work over the next couple of weeks”, adds Ward.
While not a permanent solution, this delay may provide some reassurance during a period of uncertainty around job security.
If you like reading our Editors' premium quality journalism on SuperyachtNews.com, you'll love their amazing and insightful opinions and comments in The Superyacht Report. If you’ve never read it, click here to request a sample copy - it's 'A Report Worth Reading'. If you know how good it is, click here to subscribe - it's 'A Report Worth Paying For'.