The government announced yesterday evening (Tuesday 17 March) that the significant reforms to IR35 and off-payroll working due to come into force on 6 April 2020 will be postponed for one year. They insist that this is just a postponement in light of COVID-19 and that the changes have not been scrapped altogether. This should provide businesses with some comfort in an already challenging period of time.
Employers who have been assessing the employment status of those deemed independent or self-employed contractors can pause this process and continue to treat those individuals as being off-payroll for now. As many employers will be considering ways to minimise expense and save costs, caution is encouraged when it comes to simply terminating the contract for services with those deemed self-employed as a tribunal would be prepared to look behind the written contract and apply the normal tests to establish that individual's true employment status, irrespective of whether an IR35 status determination has been made.
Any clients with concerns about self-employed contractors and the impact of COVID-19 should speak to their dedicated Employment Solicitor before taking action".
