ICSM Credit welcomes delay to IR35 which would increase tax on some self-employed workers

Ian Carrotte: self-employed need help 'not a cut in their income'

A new tax aimed at the self-employed that was due to take effect this April has been put back 12 months due to the coronavirus emergency.

In an unexpected announcement to the House of Commons last night, Steve Barclay, the chief secretary to the Treasury, confirmed the reforms would now be postponed until April 2021.

IR35 allows HMRC to collect additional payment where a contractor is an employee in all but name. Andy Chamberlain, of the Association of Independent Professionals and the Self-Employed said: “The government has done the sensible thing by delaying the changes to IR35 in the private sector. These changes have already undermined the incomes of many self-employed businesses across the UK. However, they would have done even more serious damage if they had gone ahead as planned.”

Ian Carrotte of ICSM Credit welcomed the move as several members of the credit intelligence group had expressed concerns with those in the construction industry particularly affected. He said: “It is a sensible step in this grave and unprecedented situation. The Government must also create an emergency Income Protection Fund to keep the self-employed businesses going.”

This he said it would allow the economy to pick up quickly once the crisis is over rather than suffering from a hang-over in the shape of a depression.

The Government issued this explanation of IR35: “The off-payroll working rules can apply if a worker (sometimes known as a contractor) provides their services through an intermediary. An intermediary will usually be the worker’s own personal service company, but could also be any of the following: a partnership, a managed service company, or an individual

“The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same tax and National Insurance contributions as employees. These rules are sometimes known as ‘IR35’.”

ICSM Credit

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