Hopes fading that IR35 extensions may be scrapped

The hope that the proposed rollout of the IR35 extensions to the private sector could be scrapped appear to be fading fast, now that MPs have voted through proposals at the Committee Stage of the Finance Bill last week. The implementation date of April 2021 looks set to happen, after the original date of April 2020 was delayed due to the Covid19 epidemic.

Campaigners had hoped that the government would pause to reflect on the damning report from the House of Lords Committee, which found the proposed rules “to be riddled with problems, unfairnesses, and unintended consequences.” The chair of the Lords Committee, Lord Forsyth of Drumlean, declared "Contractors already concerned by these uncertain times now have the added worries of paying more employment taxes and having their fees cut by clients making additional National Insurance Contributions. Also concerning is the number of companies getting rid of contractors in anticipation of the implementation of these new rules."

Outside Spy has found that, in spite of the delays to the proposals, private sector companies, which had already set up new processes in anticipation of the original April 2020 date, have continued to operate with these processes in place, almost as though the delay hadn’t happened. We have seen many private sector roles advertised as being for umbrella companies only, or for “PAYE only” or advertised as being “inside IR35” although this declaration would have no legal standing under current arrangements. Contractors trying to secure these roles, and wishing to keep their status Outside IR35, would have a problem negotiating to secure these roles, believes Outside Spy. Consequently, there is still an immediate need for Contractors to look closely at the roles they are taking on, particularly the contractual and financial arrangements that are in place, if they are to successfully maintain an Outside IR35 status.

Outside Spy is a business service for the independently-minded IT Contractor, that discovers contracts advertised as being “outside IR35” wherever and whenever they are published on the web.


Link to the House of Lords Committee Report in full