IR35: delayed until 2021 due to COVID-19.

The Government has announced that it will delay the extension of IR35 to the private sector until 6 April 2021. It would be good news if it didn't come in such sombre circumstances.

It is of course irritating for businesses who had already invested in their IR35 preparations – perhaps moving contractors onto payroll or amending documentation for compliance – that the changes have been postponed with less than three weeks to go.

However, in all reality the Government didn't have much choice. Even before the outbreak, it was clear that many firms weren't ready for the impact of the revised taxation rules and the changes they would need to make to their businesses as a result.

With the added strain caused by COVID-19, there was clearly potential for even more severe disruption – not least the loss of many contractors' livelihoods – if the Government had pressed ahead.

So what happens now?

Every business right now is focused on keeping the lights on in response to COVID-19. That's clearly the right thing to do in the short term.

The important thing to note as far as IR35 goes is that this is a delay to the changes rather than a cancellation, as Treasury Secretary Steve Barclay has been keen to emphasise.

So, what I would urge every business leader to do, especially HR directors and finance directors, is mark your card to revisit IR35 in three to six months' time. Set a calendar reminder for yourself and your team, so that you can prepare in good time and not be caught on the hop when it comes round again this time next year.

Or, if you haven't already done so, sign up to HR and Employment alerts from Foot Anstey. We're keeping an eye on IR35 and will include regular reminders and updates on it in our monthly employment bulletin once we settle into 'the new normal'.

As ever, if you need support with employment issues around IR35, or indeed in response to the coronavirus outbreak, please do get in touch with me or a member of our Employment Team.