The extension of off-payroll (IR35) rules to the private sector in April 2020 should be delayed by a year, following the cancellation of Budget 2019.
Chancellor Sajid Javid intended to deliver his first Budget speech in November, only for it to be scrapped after a second Brexit extension was granted. In light of that, the Association of Tax Technicians (ATT) has called for the rollout of IR35 to the private sector to be delayed by 12 months. It claimed delays to the Budget and subsequent Finance Act will leave private-sector businesses with significantly less time to prepare.
From April 2020, IR35 rules that currently apply to public-sector contractors are scheduled to be extended to the private sector. Medium and large-sized organisations that use private- sector contractors will determine whether an engagement falls within the rules from this point.
“We strongly urge the Government to delay this major shift in how businesses engage with contractors until 2021.”
Jon Stride, co-chair of ATT’s technical steering group, said: “We strongly urge the Government to delay this major shift in how businesses engage with contractors until 2021. We anticipate low levels of compliance, increased numbers of errors, and greater demand on HMRC for support at a time when their resources are already strained.
“The Government previously stated they were committed to learning from the rushed introduction of these rules to the public sector in 2017.
“We believe that introducing the off-payroll rules to the private sector in April 2020, when final legislation and detailed guidance are not yet available, risks repeating the errors made in the public sector, rather than learning from them.”