Much has been made of whether the reform will now be enforced in time. After all, in the government’s eyes, this is the second time private sector changes have been delayed.
However, while IR35 reform is a needless, short-sighted tax grab from HM Treasury, it still seems unlikely it will be scrapped.
Rolling similar changes out in the public sector in 2017 was the first step towards enforcing them in the private sector, while the government still views IR35 compliance as an area in which it can reel in revenue for the Treasury — the £1.3bn a year by the 2023/24 tax year that HMRC believes will be missing as a result of contractors abusing the rules suggests as much.
Of course, this figure seems exaggerated, as does HMRC’s view that nine in 10 contractors who ought to be working inside IR35 are currently working outside the legislation.
However, they tell you everything you need to know about how the government perceives IR35, along with the supposed level of non-compliance.
The above, plus the fact that the Finance Bill - with IR35 reform pencilled in for 2021 - is now one step closer to being signed off, means contractors, and private sector companies, need to work off the basis that it will be introduced next year.
And until then, independent workers must take responsibility for their own IR35 status and compliance when working in the private sector.
Seb Maley is chief executive of Qdos
