The government has announced that the extension of IR35 to medium and large companies in the private sector is being postponed by a year, to 6 April 2021.
The IR35 tax rules are aimed at making sure that where a contractor provides their services through their own limited company and they would be treated as an employee for tax purposes if that intermediary were not used, that contractor is subject to broadly the same tax and National Insurance contributions as employees. The end user or client (in most cases) will be responsible for making the necessary deductions as well as carrying out the status determination in the first place.
Employment law expert, Caroline Illing comments,
"This decision will be welcomed by employers and contractors especially in such challenging times. This now means that there is more time for businesses and contractors to fully review the arrangements they have in place and take action in good time before the changes come into force next year. If your business needs assistance please contact a member of our team."
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