Controversial tax reforms affecting freelance workers, including journalists, have been postponed for 12 months due to the coronavirus outbreak.
Chief Secretary to the Treasury Steve Barclay said the move to delay reforms to IR35 legislation was designed to help businesses and individuals, but stressed they had not been cancelled.
Legislation introduced in 2000, referred to as IR35, sought to prevent the exploitation of personal service companies for tax avoidance purposes. href="https://meed.com/
Further changes were expected to be introduced from next month, which led to warnings this would prompt some freelance workers to retire early, find contracts abroad or look for other jobs.
Speaking to conclude the Budget debate, Barclay said: “I can also this evening announce that the Government is postponing the reforms to the off-roll payroll working rules IR35 from April 2020 to April 6 2021.
“Government will therefore not move the original resolution tonight but will shortly table an additional resolution confirming that we will reintroduce the off-roll payroll working rules provisions by amending the Bill with a commencement date of April 6 2021.
“This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.
“This is a deferral, not a cancellation and the Government remains committed to reintroducing this policy to ensure people working like employees, but through their own limited company, pay broadly the same tax as those employed directly.”
Media union Bectu said it welcomes the delay to IR35.
Head of Bectu Philippa Childs said: “We have been calling for IR35 changes to be delayed for some time and the urgency for this to happen has been amplified by the coronavirus crisis.
“Now is not the time to introduce complicated measures that the private sector of the economy was not fully prepared for.
“This will provide some small relief for many freelancers who are now dealing with a scarcity of work due to coronavirus.”
But Childs said the government mist do more to support freelance workers and the self-employed who are facing “extremely challenging and uncertain times” during the coronavirus pandemic.
“Further measures need to be introduced to ensure that freelancers who facing their entire livelihoods being wiped out are not left in financial ruin,” she said.