Further IR35 Reform Delay Looking Unlikely

Back in March, when it became clear that the Covid-19 pandemic was going to dramatically alter the employment landscape, the government announced a postponement of the much maligned IR35 reform in the private sector that was due to come into action on 6th April 2020.

Then, in April, the House of Lords’ published their review of the proposed changes stating that the reform is plagued with ‘problems’, ‘unfairness’ and ‘unintended consequences’.

As a result, former Brexit secretary David Davis MP tabled a Finance Bill amendment to delay the reform to 2023/24 instead. Mr Davis believed that due to the findings of the House of Lords’ review, the government needed to ‘devote the time to analysing’ the recommendations of the review. He, and other supporting MPs (such as Ed Davey MP and Meg Hillier MP) believe that a year’s delay simply is not long enough as ‘the effects of the pandemic are going to be felt for considerably longer’.

However, on Tuesday 19th May, Labour declined to vote on the amendment, making a vote redundant and meaning that the Finance Bill passed without division, in turn, meaning that the IR35 reform is still set to go ahead in April 2021.

Jesse Norman, financial secretary to the Treasury, said that delaying the reform would have ‘very significant drawbacks’ for the UK, with a ‘significant fiscal cost’, and refused to entertain the idea of any sort of delay.

However, David Davis has apparently not given up, tweeting “We were unable to vote on my #IR35amendment this afternoon as the House authorities did not select it. However, Labour were supporting the Government anyway, so we could not win – this time. Watch this space.”

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