The government has announced a last-minute postponement to the implementation of the Off-Payroll Tax to the private sector in light of the recent Covid-19 outbreak, with the legislation now due to be reintroduced in April 2021.
This comes after pressure from contractors and campaigners, who warned that the inevitable loss of work due to the virus for contractors deemed ‘inside IR35’ and effectively forced into ‘zero rights employment’ would prove catastrophic.
“This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals,” announced Chief Secretary to the Treasury, Steve Barclay MP to the House of Commons.
“This is a deferral and not a cancellation, and the Government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly.”
Though Government has stated its intentions to legislate next year, contractors, clients and industry stakeholders will no doubt welcome the valuable time granted. The announcement presents significant scope for greater consideration of the ill-considered measures, and further discussion over the alignment of employment status for tax and employment rights purposes, to combat the issue of ‘zero rights employment’ that Off-Payroll threatens to escalate.
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