Government ‘committed’ to rolling out IR35 reforms to private sector next year

The government has affirmed it is “fully committed” to implementing the extension of IR35 off-payroll working reforms to the private sector in April 2021.

This is in spite of a damning report published yesterday [27 April 2020] on the tax legislation from the House of Lords.

Speaking yesterday at the second reading of the Finance Bill, Jesse Norman, financial secretary to the Treasury and Conservative MP for Hereford and South Herefordshire, said the government will introduce an amendment to the bill “in due course” to legislate for the new start date next year.

The new rules were originally set to take effect in April this year; however, the government announced in March that implementation would be delayed by a year because of the coronavirus crisis. 

“Taxes are rarely popular or straightforward,” Norman said, “but they are necessary to support our public services. Now, more than ever, the government has a duty to ensure that the rules are applied correctly.”

Norman said that the government was still “fully committed to introducing these reforms to ensure working like employees but through their own limited companies pay broadly the same tax as individuals who are employed directly. That has not changed”.

However, in what could be seen as a glimmer of hope for the new rules’ opponents, Norman went on to say that the government will use the additional time to commission further external research into the long-term effects of the reforms in the public sector, “with the intention that that research will be available before the reforms come into effect in the private sector in 2021”.

Commenting on the latest action, Dave Chaplin, director of the Stop The Off-Payroll Tax campaign and CEO of ContractorCalculator, said he will now “work tirelessly to ensure no roll-out of this toxic tax ever happens, and we urge the entire sector to get behind us. 

“It is important that contractors continue to talk to their MPs to make their voices heard and spell out the damage that off-payroll will have on their lives and livelihoods, as well as the UK economy.”

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