The UK Government confirmed that implementation of the reforms to “off-payroll” working (IR35) in the private sector would be postponed to April 2021. Although no changes to the substance of the rules are expected, it does allow clients, agencies and contractors to focus immediate attention and effort on dealing with the impact of COVID-19 and more time to prepare for the new rules.
Whilst the announcement was widely welcomed by the contracting industry, it may be too late where (with less than three weeks to go) businesses have already completed workforce adjustments in preparation for April 2020, for example by pre-emptively moving contractors to direct employment or engagement via an “umbrella” company. Businesses that were well advanced in their IR35 planning may want to urgently consider their options in light of both the 12 month deferral and also their wider staffing needs impacted by COVID-19.