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Palace of Westminster (Houses of Parliament) and Big Ben

Finance Bill: IR35 resistance falls at final fence


Campaigners lobbying for amendments to the off-payroll rules and the loan charge were thwarted in the third reading of the Finance Bill in the House of Commons on Wednesday night.

30th Jun 2020
Tax Writer Taxwriter Ltd
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After a game of parliamentary cat-and-mouse, campaigns to alter plans for the private sector off-payroll rules and loan charge came up against the government's big majority in the report stage for the draft Finance Bill 2020 this week.

Opposition amendments

The proposed amendments put forward by opposition parties ahead of the debate covered topics including four groups of amendments seeking to delay or remove the off-payroll working rules. The options were:

  • Remove the entire schedule containing the off-payroll working rules from the Bill.
  • A delay in the introduction of the off-payroll rules to allow a review to be carried out by the end of 2025, which should include an assessment of:
    • impact on individuals’ livelihoods
    • impact on individuals’ employment rights
    • relevant business practices
  • Delay the introduction of the off-payroll working rules until April 2023.
  • Make roll-out of off-payroll working to the private sector conditional on introducing employment rights to those deemed to be inside IR35, so they are treated under employment law as having exactly the same rights as employees.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
02nd Jul 2020 08:45

Seb Maley from Qdos was in touch first thing this morning to report that MPs voted against an amendment that would have delayed the changes until the 2023/24 tax year.

As a result, when the bill gets Royal Assent, contractors will lose the right to set their IR35 status when engaged by medium and large private sector companies from 6 April 2021 . This will become the responsibility of the company engaging the worker, with the liability transferred from the contractor to the fee-paying party.

Maley obviously wasn't happy about the result: “Despite concerns raised by a number of MPs, who rightly exposed the flaws of this legislation and made it clear they do not believe changes are necessary, it seems there's no turning back now.

“The reform is short-sighted and if mismanaged poses a risk not just to contractors but to hiring organisations and recruiters. It’s therefore up to private sector firms to prepare for the changes, which can be managed with the right approach. However, work must start immediately - I can’t stress enough how important this is.

“For companies to compliantly engage genuine contractors beyond April 2021, they must avoid risk-averse policy decisions and instead prioritise fair and considered IR35 status assessments. Whilst our work alone shows that thousands of businesses will be ready for the changes, many other companies - from banks to oil firms and pharmaceutical giants - should rethink how they plan to manage this reform.”

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