Last night (17 March 2020) the UK’s Chief Secretary to the Treasury, Steve Barclay, announced in the House of Commons that the government is postponing the implementation of the changes to the application of the off payroll working tax rules to private sector clients (IR35) from 6 April 2020 to 6 April 2021 to ease pressure on businesses and individuals struggling with the COVID-19 crisis.

The Chief Secretary reiterated that it was “a deferral, not a cancellation” and that “the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company, pay broadly the same tax as those employed directly”.

Yesterday’s announcement is somewhat surprising given the confirmation in last week’s Budget that the IR35 reforms would go ahead as planned but illustrates clearly just how quickly the government’s priorities have changed in the past week. Many contractors and their clients will breathe a deep sigh of relief and, hopefully, the delay will lead to a more considered discussion about how the new rules should be implemented and the challenges that they will present to contractors and their clients alike.

The Chief Secretary’s announcement came on the same day that the UK Chancellor unveiled the Treasury’s latest measures to combat the crisis, which we reported on yesterday (UK Chancellor’s latest measures in response to COVID-19).

Photo of Stephen Pevsner Stephen Pevsner

Stephen Pevsner is a tax partner and a member of the Corporate Department.

Stephen’s practice focuses on UK and international M&A and private equity transactions, corporate reorganizations, and new business formations. Offering a broad range of corporate tax strategy experience, his clients include…

Stephen Pevsner is a tax partner and a member of the Corporate Department.

Stephen’s practice focuses on UK and international M&A and private equity transactions, corporate reorganizations, and new business formations. Offering a broad range of corporate tax strategy experience, his clients include global corporations, investment banks, and private equity sponsors and investors.

In addition to his wealth of transactional knowledge he also has substantive experience advising on the formation of private investment funds and the establishment of investment management and advisory limited partnerships.

According to Chambers UK, Stephen is a notable practitioner in the corporate tax field, praised for “his ability to master the intricacies of tax law and understand the commercial aspects of the deal”.

Stephen is a member of the BVCA Tax Committee and is a regular speaker at conferences and contributor to publications such as the Tax Journal and Tolley’s.

Photo of Philip Gilliland Philip Gilliland

Philip Gilliland is an associate in the Tax Department.

Prior to joining Proskauer, Philip trained in the London office of a major international law firm where he worked on restructuring and insolvency, corporate M&A and tax matters. During his training contract he undertook…

Philip Gilliland is an associate in the Tax Department.

Prior to joining Proskauer, Philip trained in the London office of a major international law firm where he worked on restructuring and insolvency, corporate M&A and tax matters. During his training contract he undertook a secondment at Unilever.

Philip earned his B.A. from St Catharine’s College, University of Cambridge.