The Government has voted to approve the Finance Bill without division, meaning an IR35 amendment tabled by David Davis MP was not been.
Mr Davis had called for changes to the off-payroll working rules (IR35 reform) in the private sector to be delayed until 2023/24. However, the vote to approve the Finance Bill means IR35 reform is still set to be introduced in April 2021, as previously announced, with the Treasury’s Jesse Norman revealing that a review of the changes will take place six months after their introduction.
speaking about the news, Seb Maley, Qdos CEO, commented: “It’s a big disappointment that IR35 reform will not be delayed, but then again it’s of no real surprise that the changes will go ahead next year. The Government has buried its head in the sand when it comes to IR35, continually ignoring compelling arguments that call for a rethink of the legislation. The Coronavirus crisis also means raising tax receipts has become a priority for the Treasury – even if that means contractors may be wrongly forced into ‘zero-rights employment’ as a result of the reforms.
“With less than a year until IR35 reform arrives in the private sector, businesses must continue their preparations. And companies that haven’t started yet must get to work. The changes are needless and short-sighted, but by taking a measured approach and prioritising accurate assessments, firms can continue to compliantly engage genuine contractors outside IR35. Meanwhile, the businesses that have banned contractors altogether or blanket-placed these workers inside the legislation should reconsider their stance immediately.”
