The Treasury has announced that IR35, the incoming April 2020 legislation designed to combat tax avoidance by both workers and the firms hiring them, is under review after multiple concerns voiced by both contractors and employers.
The initial positive response to the news was soon after tempered when it was revealed that the review into the controversial legislation would be limited to how the off payroll working rules are practically implemented in the private sector, rather than any changes to the rules themselves. Working with a select number of London-based organisations on implementation practices only, the review is expected to be concluded by mid-February. The government also said it would launch a separate review to look at how it can better support the self-employed, though no dates or details of this have been published.
Despite the intended review completion date, it was confirmed that the final legislation will not be totally clarified until the Budget announcement on March 11, which will leave a very short window for employers and contractors until the proposed implementation date: the same challenge that the public sector faced when the legislation was introduced there in 2017. Businesses and contractors are advised not to wait until the Budget to prepare for IR35, but to act now, even though there have already been a number of calls for a significant delay to the implementation date. A major concern with the timescale is that decisions on pre- and post-April contracts are being made now and over the coming weeks, without anyone knowing the full extent of the legislation. Contractors are rightly concerned that some employers will see the safe option to be not using contract staff at all until IR35 is in place and understood across the board.
If you want to know more about IR35 and where you stand in relation to these new guidelines, either as an employer or a contractor, you can download our handy guide. And if you would like to discuss how IR35 might affect your hiring plans in 2020, contact us today.