Government to delay controversial IR35 tax reforms amid coronavirus pandemic

18 March 2020, 08:49

Steve Barclay said the government "remained committed" to the policy, but needed to defer due to coronavirus
Steve Barclay said the government "remained committed" to the policy, but needed to defer due to coronavirus. Picture: PA

The government has postponed the planned introduction of controversial tax reforms due to Covid-19.

The introduction of the IR35 reform, which allows the tax office to collect more from freelancers who are essentially employees of a company, will be pushed back to next year.

It was due to begin next month, but the outbreak of coronavirus has led to the need to defer until next April.

READ MORE: [Live] Boris Johnson faces questions from MPs

Speaking on Tuesday, Chief Secretary to the Treasury Steve Barclay stressed the move was to delay the reform, not cancel it.

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

"This is a deferral, 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."

READ MORE: What is the Government doing for businesses during the coronavirus pandemic?

IR35 legislation introduced in 2000 sought to prevent personal service companies being exploited for tax avoidance purposes.

The changes due to be made next month had sparked warnings that affected freelancers may retire early, look for work abroad, or change jobs entirely.

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