Parliament deals final blow to anti-IR35 private sector roll-out

It’s full steam ahead now for the April 2021 roll-out to the private sector of the Off-Payroll rules, following Parliament’s acceptance yesterday [1 July 2020] of the Finance Bill.

The final blow came when MPs voted against an amendment that would have delayed the changes until the 2023-24 tax year.

Critics of the move to enforce the rules in 2021 described it as “short-sighted” and “disappointing”.

MPs had tabled amendments to the Finance Bill to prevent next spring’s roll-out, but yesterday, those favouring the amendments were outvoted 317 to 254.

As IR35 specialist Qdos described the forthcoming changes, contractors will lose the right to set their IR35 status when engaged by medium and large private sector companies. This will then become the responsibility of the company engaging the worker, with the liability transferred from the contractor to the fee-paying party.

“It is very disappointing that after four years of campaigning we have not achieved the primary aim of stopping this legislation. We, and our 4,000 campaigners, did everything we could – and the Lords Report, from their inquiry into the so-called reforms, accurately detailed the damaging effect these changes will have on the UK’s flexible workforce,” said Dave Chaplin, director of the Stop the Off-Payroll Tax Campaign and CEO of ContractorCalculator.

“The reform is short-sighted and if mismanaged poses a risk not just to contractors but to hiring organisations and recruiters,” said Seb Maley, CEO, Qdos.

“It’s therefore up to private sector firms to prepare for the changes, which can be managed with the right approach. However,” Maley warned, “work must start immediately – I can’t stress enough how important this is.”

Chaplin added: “With careful planning, firms have nothing to fear and can hire freelancers compliantly. We have already had a dress rehearsal… We now need to work together to avoid a cliff-edge scenario.”

Chaplin went on to predict that there would be greater clarity from the courts over the issue in the next year, “as binding authorities are released – and these are likely to favour the self-employed and provide a legal bedrock upon which firms can compliantly hire contractors, without fear of later repercussions”.

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