After a long fight, the Report Stage of the Finance Bill yesterday confirmed that the reformed IR35 legislation will go ahead in April 2021 with no further delays. Amendment 20 to delay the introduction of IR35 tax changes until the tax year 2023-24 was proposed by cross-party lead signatories David Davis (Con) and Sir Edward Davey (Lib Dem). Although Labour supported the amendment the vote was lost 317 to 254.
The past four years have seen a lot of movement over the proposed implementation of the off-payroll rules in the private sector. After a problematic introduction to the public sector in 2017, many opponents of the off-payroll legislation have fought to delay its further implementation. In light of the impact of the Covid-19 crisis, the potential impact of the rules on the wider labour market, particularly the gig economy, has been overlooked.
The off-payroll reforms have encountered significant opposition from campaigners. The Stop the Off-Payroll Tax campaign has received cross-party support in parliament, with issues such as unlawful blanket rulings condemned by a number of prominent MPs. Both the Lords report and the Tax Faculty of the ICAEW proposed that the legislation was fundamentally flawed and should be delayed in favour of finding an alternative.
Responding for the government, Jesse Norman that it would be a ‘serious mistake’ to remove IR35 reforms from the Bill that would cost the country ‘many hundreds of millions of pounds’. Mr Norman claimed that non-compliance with the rules was expected to cost the Treasury £1.3 billion alone in 2023/24. With this in mind, the government are eager that the off-payroll reforms will now go ahead without further delay.
What’s important is that contractors act now to ensure that they are protected from the fallout of reform. Amaze Umbrella’s service has undergone rigorous assessment to attain FCSA accreditation, giving you a fully compliant IR35 solution. Our service also offers benefits of employment that permanent staff receive as well as Perkbox* benefits, insurance cover and a seamless onboarding experience from our first-class customer service team. To speak to a member of the Amaze team see here.
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