Local accountants and tax advisers, Trueman Brown, warn freelancers that HMRC have postponed the implementation of IR35 to the private sector…for now!
The coronavirus outbreak has had another major effect – the suspension of extending the IR35 rules to the private sector.
On Tuesday, 17th March 2020, the Chief Secretary to The Treasury, Stephen Barclay announced that there would be a twelve-month delay to the implementation of the rules. Barclay stated: –
“This is a deferral not a cancellation and the Government remains committed to reintroducing this policy.”
The deferral of the rollout of the rules came in response to the coronavirus outbreak and was seen as an attempt to help businesses and individuals during this emergency.
Business groups are happy with the postponement and hope that this will allow HMRC to address concerns over the IR35 rules.
We have already heard from freelancers over the last couple of days that their contractor is now willing to extend contracts to their personal service company (PSC) until 5th April 2021.
We have also been asked by our client’s if there is anything, they could do to ensure that they ‘stay outside IR35’ when 6th April 2021.
Our advice would be to look at the recent case of RALC Consulting Limited v HMRC. The owner of RALC Consulting Limited, Mr Alcock, used HMRC’s CEST Tool to check his status together with detailed notes relating to his answers. If you could carry out a similar exercise and provide your contractor with the results of your check, you may convince them that you are providing services outside of IR35.
We also wonder aloud whether the current situation may change the situation if the country is put into lockdown and freelancers are forced to work from home. If the freelancer can show that he can perform the services required efficiently, will the contractor allow the working practice to continue and cede more control over how and when a task is performed?
Local accountants and tax advisers, Trueman Brown, deliver vital service to small business. If you require any further advice, then please contact us.
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