Finally a somewhat welcome piece of news amongst the doom a gloom of the Covid-19 outbreak. IR35 has been delayed by the government until April 2021 according to reports.
The Government have cited the Coronavirus outbreak as their reasoning behind the delay stating that “This is a deferral in response to the ongoing spread of Covid-19 to help businesses and individuals.’’
The delay is likely to be welcomed by thousands of locums across the UK, many of whom are self employed and would find the new tax reforms unfavourable.
The Government was also keen to emphasise that this would only be a delay and not a cancellation of the new reforms, which despite serious objection from the self employed and business owners alike, will be going ahead in April next year.
What is IR35?
IR35 is a piece of legislation created to prevent workers and the companies paying them, from tax avoidance. If a worker was to fall inside the new IR35 rules they would have to pay income tax and national insurance contributions as if they were employed.
The new tax rules could reduce a workers income significantly which is why many self employed workers and business’s (including Team Locum) rejected them.
Should I be concerned about IR35?
As a locum the new tax rules may impact you. So while it’s not something to panic about, it is something you do need to be aware of and understand in the coming months.
We have previously posted a fairly thorough blog post explaining IR35 which we hope will help you understand the new tax rules. You can find more information on the new tax rules by clicking here.
What do you think of the new IR35 tax rules?
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