Lords call to postpone IR35 reform amid Covid-19 fallout
Reforms to be delayed for a year due to Coronavirus/CONVID-19
less than a week after the controversial measures were confirmed in the Budget, Chief treasury secretary Steve Barclay has announced that the IR35 tax reforms would be pushed back by one year.
Earlier this week the Financial Times reported that when speaking at a finance bill sub-committee in parliament (on March 16) Lord Forsyth of Drumlean asked the Treasury and HM Revenue & Customs whether they had considered deferring the reform, which he warned could have a "very damaging effect on the incomes of many self-employed contractors".
Lord Forsyth said, "We've had quite a lot of evidence from people directly affected by these proposed changes, and the summary of what is being suggested by these contractors is they will find themselves under very severe pressure financially as a result of those changes, and I wondered whether HMRC had considered, given the enormous financial impact which we are about to experience as a result of coronavirus, whether it might not be sensible for you to defer introducing these changes at least for six months if not a year."
Adding, "What is being proposed in the Budget I think is generally acknowledged to be inadequate in terms of the scale of the crisis and it does seem rather perverse to add an additional burden of this kind on business which could easily be deferred for six or 12 months.”
It's fantastic to see those words taken on board, with today's announcement that IR35 reforms would be delayed until April 2021. The question now is, will the reforms evolve based on experiences learned from this current crisis?
Now, as organisations navigate their way through the repercussions of Coronavirus/CONVID-19, they are going to need to learn to manage a scalable workforce and build new operational frameworks that support remote ways of working. All, while ensuring preparedness for evolving IR35 reforms to come into effect 2021.
Thankfully, yechte can help prepare organisations for this new reality.
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