Private sector urged to prepare, as MP’s vote against further delay to IR35 reform
IR35 specialist, Qdos, has responded to the breaking news that the 2021 rollout of IR35 reform in the private sector has been accepted as part of the Finance Bill and will go ahead, after MPs voted against an amendment that would have delayed the changes until the 2023/24 tax year.
It means on 6 April 2021, contractors will lose the right to set their IR35 status when engaged by medium and large private sector companies. This will become the responsibility of the company engaging the worker, with the liability transferred from the contractor to the fee-paying party.
Seb Maley, Qdos CEO, commented:
“IR35 reform in the private sector has effectively now been signed off and will arrive in April 2021. Despite concerns raised by a number of MPs, who rightly exposed the flaws of this legislation and made it clear they do not believe changes are necessary, it seems there’s no turning back now.
“The reform is short-sighted and if mismanaged poses a risk not just to contractors but to hiring organisations and recruiters. It’s therefore up to private sector firms to prepare for the changes, which can be managed with the right approach. However, work must start immediately – I can’t stress enough how important this is.
“For companies to compliantly engage genuine contractors beyond April 2021, they must avoid risk-averse policy decisions and instead prioritise fair and considered IR35 status assessments. Whilst our work alone shows that thousands of businesses will be ready for the changes, many other companies – from banks to oil firms and pharmaceutical giants – should rethink how they plan to manage this reform.”
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