The IR35 reform that was postponed  until April 2021 due to the ongoing COVID-19 situation is still on track despite continued lobbying from those that oppose it.

Since the announcement that IR35 was going to be rolled out to the private sector, many have been against it citing that the industry wasn’t ready and needed more time to prepare.  Despite the reprieve that pushed it back one year, the current economic climate has caused many to ask that this date be pushed back further to assist an already troubled sector.

When responding to lobbyists  demanding that the Off-Payroll legislation should be removed from the Finance Bill, Financial Secretary to the Treasury Jesse Norman argued that such action would cost the country “many millions of pounds” in taxes that would be gained from the reform.

The Vote

Three amendments to the legislation were chosen for debate in the House of Commons by the Speaker but only one was voted on. Unfortunately, the proposed two-year postponement fell short of a majority vote and was lost by 317 votes to 254.  This now means that there is no going back and IR35 in the public sector will become a reality next April. The April 2021 rollout of the Off-Payroll Tax to the private sector was confirmed on 2nd July after Schedule 1 of the Finance Bill 2019-21 was passed through the Report Stage unchanged.

In a statement, Dave Chaplin, ContractorCalculator CEO and director of the Stop the Off-Payroll Tax campaign, commented “It’s extremely disappointing that after four years’ campaigning, we have not achieved our primary aim of stopping the legislation”.

Back Again

Having been exposed to the change in the initial lead-up to the reform in April 2020, we understand the effect that it has had and will again have in 2021.  Our service has been bolstered to support contractors that have been, and will be affected by the change.  Payments Pro have constantly reviewed the situation so that the process of moving from Ltd to PAYE is as smooth and cost efficient as possible.  Our team will always take an hands-on and proactive approach to ensure that all contractors and agencies that work with us get accurate information and the support they need at every stage of the working process and inevitable switch.

There is no turning back for the reform and not much in the way of options and that is why using an umbrella service like Payments Pro, will help you prepare for the inevitable.

If you are unsure on how this affects you or your agency please contact us on 020 3819 7220 or email us on info@paymentspro.co.uk for some free help and advice.

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