MPs propose amendment to delay IR35 until 2023-24

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MPs propose amendment to delay IR35 until 2023-24

Today (19/05/20) backbench MPs have tabled an amendment to be discussed in the House of Commons to delay IR35 until 2023-24.

This proposal comes from David Davis, the Conservative MP for Haltemprice and Howden.

Dave Chaplin, director of The Stop The Off-Payroll Tax Campaign said:

This is great news for our campaign and for the thousands of contractors who will be affected by the roll out of the legislation.  The Stop The Off-Payroll Tax Campaign has been working hard over the last year to rally some 3000 supporters to meet their MPs and spell out the damage the tax will impose on their livelihoods and the UK economy overall.  I am delighted that MPs have listened to us and to the Lords’ damning report and are pushing for a further delay until 2023.  There will no doubt be a showdown in Parliament next Tuesday when this amendment is debated and voted on but a delay will allow more people to voice their concerns, lobby their MPs and work with policymakers to come up with a way to properly recognise contracting and freelancing in the tax system.

On the 17/03/20 Stephen Barclay, chief treasury secretary announced in the House of Commons that IR35 is to be pushed back from 6th April 2020 to 6th April 2021 due to the spread of COVID-19.

At the time, Mr Barclay said:

This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.

This is a deferral and not a cancellation, and the Government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company pay broadly the same amount of tax as those employed directly.

At the end of April, the House of Lords released a report which explored the roll-out of IR35 and “exposes the many flaws in the Government’s plans.” The report named ‘Off-payroll working: treating people fairly’ was published on the 27/04/20, and urged the Government to look in to the IR35 flaws, and that a decision should be made in six months whether or not to enforce the delayed reforms in the private sector in 2021.

However, this report was almost immediately rejected, as later on the same day, Jesse Norman, the financial secretary to the treasury indicated in the House of Commons that the Government is still planning to introduce IR35 in to the Finance Bill 2020- 2021. This amendment still needs to be voted on.

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