The government has decided to defer the changes to IR35, the Off-Payroll Rules, that were due to come in the 6 April 2020 until 6 April 2021.

Stephen Barclay, the Chief Secretary to the Treasury, announced this change in response to the need to protect the economy in the light of the Coronavirus outbreak.

This sensible measure means that contractors’ personal service companies (PSCs) will continue to decide if their assignments are inside or outside of IR35. End clients, recruitment business and other Fee Payers will not be held liable for taxes and social security not paid by the PSCs.

It is not necessary at least until 6 April 2021 for end clients to carry out Status Determination Statements or insist that contractors operating through their limited companies need by placed on a PAYE Umbrella solution. In such arrangements, self-employed people themselves suffer the Employer’s National Insurance Contributions, cannot claim expenses in fulfilling assignments and yet have no employment protection or statutory leaves that are available to the genuinely employed.