IR35 has been postponed to April 2021 due to COVID-19

IR35 was set to shake the business landscape in the coming weeks, however, due to the recent COVID-19 pandemic, the Treasury has announced that it will now be postponed. 

The chief secretary to the Treasury, Steve Barclay, just announced that the government’s IR35 tax reform will be put on hold until April 2021. 

The reform was set to radically alter how private sector organisations handle the tax status of their contractors. 

The plan was introduced as HMRC predicts that less than 10% of Personal Service Companies (PSCs) comply with tax, estimating that the Treasury could miss out on as much as £1.2bn by 2023/24. 

IR35 originally came into action for the public sector in 2017 and this 2020 reform was set to align the country. 

Barclay later added that the move was part of the chancellor’s protective measures aimed at reducing the impact of COVID-19 and lightening the burden on businesses.  

He also went on to stress that IR35 was postponed not cancelled and that the government is keen to reintroduce the policy once the economy has regained a state of normality. 

This means that medium and large private sector businesses still need to be prepared for the change coming next year. 

If your curious whether IR35 applies to your business or you want help preparing, check out our informative blog here.  

Stephanie Coward

Managing Director, HCM

Stephanie Coward is Managing Director for HCM at IRIS, where she leads the strategy, innovation and growth of the organisation’s HR and payroll portfolio. She is responsible for positioning IRIS as a trusted partner to HR professionals and ensuring its solutions support the evolving needs of modern workforces.

With more than 25 years’ experience in the technology sector, Stephanie brings deep commercial and operational expertise, with a passion for improving the employee experience through technology.

Stephanie is committed to advancing IRIS’ HCM offering and helping organisations build more resilient, empowered workforces.