New off-payroll working rules have been pushed back a year amid the coronavirus outbreak, it has been announced.
The controversial rules, officially known as IR35, aim to ensure that two workers “sitting side by side doing the same work for the same employer” are taxed in the same way.
The new rules will also make employers responsible for determining employment status and liable for any underpaid taxes.
But the legislation will now be delayed by 12 months as part of the government’s Covid-19 economic response package.
Commenting on the announcement, Financial Secretary to the Treasury Jesse Norman said: “We will do whatever it takes to support the British economy through Covid-19.
“That is why, as well as the current support measures we have announced, we have delayed the off-payroll working reforms to April 2021.”
Despite delaying the new rules, the Government has reiterated its commitment to addressing the “fundamental unfairness of non-compliance with the existing off-payroll working rules”, stating that the new introduction date will be legislated in the upcoming Finance Bill.
According to official statistics, without intervention, non-compliance with off-payroll working rules will cost the public purse around £1.3 billion a year by 2023/24.
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