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IR35 reforms to be delayed due to the coronavirus

Chief treasury secretary Steve Barclay announced in the House of Commons yesterday evening that the government was delaying the roll-out of the new private sector IR35 tax regime until April 2021. The delay was announced amid a wider £350bn emergency package to support businesses in the UK.

It comes in response to growing calls for the government to offer support to the self-employed and freelancers and comes less than a week after the controversial measures were confirmed in the budget.

Barclay confirmed that the changes, which will clamp down on tax avoidance by targeting contractors for private sector companies who are seen to be providing the same service as employees, would not go ahead in April 2020 as confirmed in the budget a week ago.

Barclay said that move is part of a broad package of measures the Treasury has announced to protect the economy from the coronavirus outbreak. He stressed that the decision was “a deferral not a cancellation and the government remains committed to reintroducing this policy”.

It will come as a relief to contractors who feared businesses would find the changes to off-payroll working rules too onerous. Some will argue that the move comes too late for some, as some employers were already terminating contracts due to the complexity of the IR35 changes. The vast majority of self-employed workers however, will feel huge relief on hearing this news in these very unique circumstances.