Public sector off-payroll reforms will go ahead in April 2021

Public sector off-payroll rules will be reformed in April 2021 after an attempt to delay it failed in the House of Commons. The amendment seeking delay would have seen the reform pushed back to 2023 – significantly beyond its original implementation date of April 2020 (which was stymied by COVID-19).

The rules, known as IR35, were brought in to force in 2000, amended in 2017 and reviewed earlier this year, when a House of Lords committee described them as “riddled with problems”. 2021’s reform will not be the complete rethink that the committee suggested. Instead, it will shift the responsibility for evaluating employment status to organisations that employ individuals, rather than the individuals themselves.

The pending amendments to IR35 are proving controversial, and many observers feel that the resulting legislation will be too complex, and poses risks to both contractors and companies.

Seb Maley, CEO at contractor insurance firm Qdos Contractor, believes the reforms will pose significant challenges across the economy. He told reporters: “The reform is short-sighted and if mismanaged poses a risk not just to contractors but to hiring organisations and recruiters.”

John Bell, senior partner at insolvency practitioner Clark Bell, added: “The pending legislation is already having a huge impact on the lives and livelihoods of contractors and we have a seen a surge in the number of enquiries from contractors seeking to close down their limited companies as a direct result of the IR35 changes.” He also said that the combined effect of these reforms along with fallout from COVID-19 and Brexit would lead to the UK economy suffering “immeasurably in the years to come.”

If you have questions about the impact of reforms to IR35 on your business, don’t wait until it’s too late to investigate. Contact JW Hinks on 0121 456 0190 to find out how we can help.