Off–Payroll rules “deferred” for 12 months to 6 April 2021

The government announced on 17 March that the proposed off-payroll rules for the private sector are to be deferred for 12 months owing to Corona virus.

What should I do now?

This is welcome news but leaves many in very difficult situations, especially where they have already received inside IR35 determinations.  We are expecting to see the detail of the final legislation by the end of this week, which will assist everyone in deciding what to do now.  In the meantime, we recommend the following:

Contractors

• You should clarify with the end client and any agency their position regarding this deferral. What are their plans?  Do they intend to stick with any blanket decisions made?  Are they still going to offer an appeal process?  Are they going to offer new contracts?
• You may have decided (or been forced) to go down the umbrella route and may be considering closing your limited company. You must now consult your accountant to evaluate your position and what the options are.
• Where we are working on your case regarding an appeal against a determination please advise us, as soon as you have any information. Please note that because the rules are only deferred then you must plan for them being in place next year.  This is a real opportunity to ensure that your IR35 status is correct and now we all have more time to deal with this accurately.

Agencies and end clients

• It is decision time for end clients and agencies. Larger organisations may be so far down the line with the new rules that carrying on will be the right thing to do.  Whatever your size any work on the rules now, will inevitably assist you in the future.
• Communication is key to enable everyone to have some certainty over status in the next 12 months.

Everyone needs to act now to establish their positions.