Uk Government Postpones Changes To IR35 Tax Rules As Corona Virus Wrong Time

18th March 2020

The UK Government has postponed the introduction of a much criticised tax reform that would have meant major implications for North Sea contractors.

Steve Barclay, chief secretary to the Treasury, said the deferral of changes to off-payroll working rules would help businesses and individuals left struggling by the Covid-19 outbreak.

The rules, called IR35 and first implemented in 2000, aim to stop employees registering themselves as freelance contractors in order to pay less tax.

To improve compliance, the government in 2017 made public sector organisations responsible for determining employment status.

That same responsibility was to be extended to every medium and large private sector business in the UK from early next month.

Speaking in the House of Commons this evening, Mr Barclay said the reform would be delayed by a year. He said: "The government is postponing the reforms to the off payroll working rules, IR35, from April 2020 to April 6, 2021.

"This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.

“This is 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 broadly the same tax as those employed directly."

Aberdeen South SNP member Stephen Flynn said of the postponement: “This suspension of the implementation of IR35 is a sensible measure from the government at a time of unprecedented concern for us all.

“We know that these changes would have particularly impacted workers within the oil and gas industry so I am glad the UK Government is being proactive on this issue.

History of the IR35 Problens at https://en.wikipedia.org/wiki/IR35