Under the changes announced yesterday to National Insurance rates, both employers and employees will each be taxed an additional 1.25%. In his speech in parliament Boris Johnson’s reason for the
IR35 reforms delayed for 12 months amidst coronavirus outbreak
Chief Secretary to the Treasury, Steve Barclay, confirmed in parliament on the evening of 17 March 2020 that the reforms to the off-payroll working rules, initially due to take effect from 6 April 2020, would actually be delayed for a period of 12 months, until 6 April 2021.
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 remain committed to reintroducing this policy to ensure that people who are working like employees, but through their own limited company, pay broadly the same tax as those employed directly.”
This is part of additional support for businesses and individuals to deal with the economic impacts of COVID-19. This means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021.
It is important for any other impacted organisations and individuals to remember that the reforms are being postponed, and not completely cancelled, so it would be advisable to remain informed about the changes that will come into effect from 6 April 2021.