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Off-payroll working delayed until April 2021

Kerry Hull

Kerry Hull | Marketing Manager

Wednesday 18th Mar, 2020

A shock announcement on the 17th March 2020 saw Chief treasury secretary Steve Barclay announce that the change to the off-payroll working rules will be delayed for one year to 6th April 2021.  

This is part of additional support for businesses and individuals to deal with the economic impacts of Covid-19. The delay means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021.

This is a deferral not a cancellation

This announcement is a deferral of the introduction of the reforms, not a cancellation. The Government remains committed to introducing this policy to ensure that people working like employees, but through their own limited company, pay broadly the same tax as individuals who are employed directly.

Paul Malley, Managing Director said, “Although many agencies and end clients may breathe a sigh of relief at the delay, there are lots of business who have already started to prepare for this change by implementing IR35 plans throughout their business and providing status determination statements. Given this is a delay not a cancellation we would urge those businesses to continue to work on their processes in order to ensure they are well prepared for April 2021.”

“The IR35 legislation has not changed, so if an inside determination has been given then we would also urge those contractors to work compliantly,”

Given this is a delay not a cancellation we would urge those businesses to continue to work on their processes in order to ensure they are well prepared for April 2021.

So, who has the IR35 tax liability?

The current position (until April 2021) is that, in the private sector, it remains the PSC’s responsibility to determine IR35 status and to pay the right amount of tax to HMRC. It is the contractor’s responsibility to speak to their accountant about whether they should pay themselves salary only going forward. This is particularly relevant where the client has given an inside IR35 SDS. However to be clear it is not the client’s (nor the agency’s) responsibility to police this during this tax year but agencies should make it clear that they expect PSCs to meet their obligations to pay the right amount of tax.

To be clear it is not the client’s (nor the agency’s) responsibility to police this during this tax year but agencies should make it clear that they expect PSCs to meet their obligations to pay the right amount of tax.

Unprecedented times

Although the whole country is going through unprecedented times we can reassure you that it is currently business as usual at PayStream and we have strong contingency plans in place to continue to support all of our customers during this time.

We’ll of course continue to monitor the situation as it develops and will continue to keep our clients and contractors up to date.

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