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“This postponement will be a welcome relief for contractors who are facing great uncertainty as a result of the current COVID-19 pandemic. Contractors should not be complacent, however, this is not a free pass to use a Personal Service Company for a role that has now been captured inside IR35. Since responsibility for IR35 compliance remains with contractors for the time being, they need to ensure that they are meeting their obligations over the next 12 months and have a robust IR35 review from a specialist firm.

“The new date will allow businesses who have yet to adequately prepare for the IR35 changes enough time to take appropriate action, with much clearer guidance from HMRC than they have had previously. Hopefully some of the businesses who have implemented knee-jerk blanket bans on contractors will also now have time to reconsider their strategy for ensuring access to flexible expertise.

“Those end hirers that have invested in getting IR35 right are well prepared for next April and can now use the next 12 months to consider how to accommodate PSCs for roles currently thought to be inside IR35. This might include changing contracts to ensure that the roles can be considered outside and remain compliant.

“We would advise all businesses who work with contractors to build IR35 compliance into their planning for the next financial year, bearing in mind that it has taken many firms six months to prepare for the initial deadline.”

What is our stance on this postponement of the IR35 Changes?

It is disappointing that the government waited until such a late stage to change their minds on the timeline for the ‘Off Payroll Worker’ changes and that it took the impact of COVID-19 to appreciate how unprepared the UK end hirers were. We do however think that a 12 month extension is the right thing to do. It gives hirers and workers more time to make sensible, informed decisions for the changes ahead and work more collaboratively on changing working practises, policies and procedures to support our genuinely self-employed workers.

What is our advice to UMB employees that moved from a PSC on the stance of the end hirer?

The 12 month delay means the responsibility of determining the IR35 status stays with the worker. Some workers will be in receipt of SDS’s, others will have been subject to a blanket ban. We will work with all our UMB employees and PSC customers ensuring they can continue to trade via the right vehicle and remain compliant. This is not a free pass to be non-compliant, it is an extension to do things right and reverting to a high street accountant with no specialist knowledge is not the right thing to do. Intouch can support your PSC and your umbrella employment through our Flex service. Flex (formally freeflex) offer’s the opportunity to flexibly work through both Umbrella and PSC consecutively at no additional cost, any of our customers currently in our Limited Company service may want to look at moving over to Flex so that they are prepared for any swift changes in their working practises. We are a specialist in this area and will help you through these postponed changes.

To learn more about our Flex service, please click here

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