The Government has announced that the Off-Payroll rules, due to come into force on 6 April 2020, have been delayed for 12 months. This is in response to the challenges caused by Covid-19.
This is a welcome announcement. Our observations over the last few weeks have been that engagers of freelancers and contractors have been taking the view that the majority of freelancers were employees for tax purposes. This approach by engagers has more often than not been fuelled by a fear of wrongly implementing their new responsibilities under the proposals, which were onerous. Had the rules proceeded as planned on 6 April 2020, many individuals would be taxed as employees without the security and many of the employment rights enjoyed by permanently employed members of staff. Indeed, many have already transitioned to being taxed as employees and for those, the deferral has come too late.
Whilst this is only a deferral, it does represent an opportunity to continue lobby Government on the significant issues caused by these changes before they implemented. UK200Group Freelancers and Contractors and Tax Panel will continue to make representations to Government over the coming months on behalf of our clients.
Full Government information is available here. Should you need any assistance on this matter please contact our Employment team on 0161 941 4000 or via email.
Credit: James Abbott
Director Abbott Moore Limited
Chair of UK200Group Freelancers and Contractors and Chair of UK200Group Smaller Firms