Late IR35 amendment shot down in parliament

An attempt to delay the off-payroll rules extending to the private sector by another two years has been defeated in parliament.

The last-minute campaign for a two-year deferral was triggered by the economic fallout from the coronavirus pandemic.

But MPs failed to vote on a suggested amendment to Finance Bill 2019-21, which would have seen the rules kick in from April 2023.

As a result, the changes are one step closer to taking effect from April 2021 as the bill moves to the committee stage within parliament.

Should it get the green light, medium and large private-sector firms will be responsible for setting the tax status of any contractor from next April.

The rules, commonly known as IR35, were due to extend to the private sector from 6 April 2020.

However, that was pushed back for 12 months as HMRC's stretched resources were redirected to deal with the coronavirus crisis.

Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed, said:

"There are inherent flaws in the IR35 proposals and the contractor sector is already under immense strain because of the coronavirus crisis.

"The last thing this embattled sector needs now is the ill-conceived and destabilising changes to IR35."

Speak to us about the off-payroll working rules.