Articles - 18th March 2020

IR35 delayed for a year due to concerns around COVID-19

Words by The UP team

IR35 reforms to be delayed for a year due to coronavirus (City A.M.)

Chief treasury secretary Steve Barclay this evening announced that the IR35 tax reforms would be pushed back by one year, less than a week after the controversial measures were confirmed in the Budget.

Speaking at the despatch box in today’s Budget debate in the Commons, Barclay confirmed that the changes, which will clamp down on tax avoidance by targeting contractors for companies who are, in practice, providing the same service as employees, would not go ahead in April as previously expected.

Instead, the measures will come into effect on 6 April next year.

Barclay said that move is part of a broad package of measures the Treasury has announced to protect the economy from the coronavirus outbreak.

He confirmed that the decisions was “a deferral, not a cancellation, and the government remains committed to reintroducing this policy”.

The Budget announcement had been met with anger by businesses, who had pushed back against the reforms.


Johnson Urgently Pressed To Cover Self-Employed Income Wiped Out By Coronavirus, (Freelance UK)

The outgoing Labour leader said support for freelancers affected by COVID-19 was one of five “demands” which he made of the prime minister in a face-to-face meeting at Number 10.

Outlined in a letter which he Tweeted, the demand by Mr Corbyn for pandemic-hit sole traders to get extra protections came after new prevention measures were unveiled by the PM.

The anti-spread measures will be life-changing for many Brits, especially freelancers — a stop on all “non-essential” contact with others for example, and a stop on all “unnecessary” travel.

A petition calling the government to go further than its Budgetary aid for coronavirus-hit freelancers currently stands at 448,052 signatories.

Due to this large volume of support, the government must now hold a debate on the petition’s central demand — that Statutory Sick Pay is given to freelancers during the ongoing outbreak.

Since their letter, which also calls for a mitigation fund to cover self-employment income lost to coronavirus, IPSE has issued three-fold, non-medical advice to independent workers:

  1. Start discussing COVID-19 preparations with your clients.
  2. Consider how coronavirus may affect your contractual obligations.
  3. Check what health or income protection insurance you have in place.

To one dejected freelancer reflecting online however, the PM’s home-working edict smacks of ‘out of sight out of mind’ as already, she wrote, “we self-employed feel unseen.”

In light of Mr Johnson’s package also asking for 14 days’ lockdown of households containing symptoms (a new constant cough and a fever), another freelancer sounded more upbeat:

“Had an email from a recruiter…saying if you’re self-isolating but applying for jobs that video interviewing is available. Even in the toughest of climates, recruiters keep on recruiting.”


Coronavirus risks ‘income crisis’ for millions of self-employed workers (Yahoo Finance UK)

The UK government has been warned millions of self-employed workers risk an “income crisis” as their work dries up during the coronavirus outbreak.

The government has been under mounting pressure to extend sick pay to the low-paid, hike payments and cover firms’ costs during the outbreak. Two million workers earn too little to qualify, and the legal minimum is less than a third of average incomes.

But around five million self-employed people not only have no employer to cover several weeks’ pay if they fall ill, they also face the growing threat of lost work for months to come.

Calls are growing for a state-backed financial lifeline for the self-employed. There are concerns some who run their own firms will feel no choice but to keep working to pay their bills, even if they are ill or should be self-isolating.


IR35 changes 2020: why new HMRC tax rules confirmed in the Budget are feared by self-employed workers (iNews)

Tens of thousands of self-employed workers are facing a higher tax bill as HMRC tightens the net on IR35 – a complicated piece of legislation designed to crack down on a tax loophole used by self-employed individuals operating through a company.

In April, many more workers will come under the umbrella of IR35. It means self-employed people who work for a company like an employee may have to pay the same level of tax that permanent members of staff pay. The changes will bring in £3.1bn in additional tax revenues between 2020 and 2024, according to HMRC.

However, many self-employed workers are concerned that businesses will find the changes to off-payroll working rules too complicated and they will suffer as a result.

Despite the opposition, on 27 February HMRC confirmed that it “believes it is right to address the fundamental unfairness of the non-compliance with the existing rules”.


 Five million self-employed workers ‘could be forced into debt or having to work while ill’, (The Telegraph)

Britain’s five million self-employed workers are among the most at risk of losing out financially to coronavirus, experts have warned.

One freelancer, who works in events, told Telegraph Money his monthly income has already fallen by 75pc since the start of the outbreak, due to falling demand from clients. Self-employed people who have to self-isolate or take time off work are even more at risk, as they are not entitled to statutory sick pay. 

MPs and think tanks said the Government’s stopgap for the self-employed, which was announced in the Budget, did not go far enough.


Budget 2020: Sunak’s 20 Self-Employed Nods Hardly Lift Freelancer ‘Gloom’ (Freelance UK)

The verdict is from the UK’s very own freelance trade body IPSE, and beyond Mr Sunak’s numerous mentions of its members, the downbeat assessment does look justified.

Unwieldy changes to IR35 affecting freelancing via a limited company got his go-ahead, for example, and he cut Entrepreneurs’ Relief from its lifetime limit of £10million to just £1m.

Ironically though, what Mr Sunak failed to announce for the self-employed may actually explain the disappointment from freelancers’ supporters more than what he did announce.

In fact, despite a massive surge in support in recent days for a petition calling for freelancers to be given Statutory Sick Pay “during coronavirus“, the chancellor was unmoved.

So although a £12billion package to help businesses and individuals through the outbreak was unveiled by Mr Sunak, it contains no SSP provision for the self-employed.

Instead, the chancellor said people ineligible for SSP but who are on Contributory Employment and Support Allowance can claim from day one, instead of day eight.

Late Payments

The government plans to consult on the merits of toughening the Small Business Commissioner.

Home Loans for the Self-Employed

The government plans to explore how to improve guidance for mortgage applicants who work for themselves.

Tax burdens

The government will in the summer launch an interactive tool to help people who run their own business better navigate the tax system.

Mums and dads who freelance

The government will consider how to provide appropriate support to self-employed parents.

Would-be entrepreneurs

The government will extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021-22 (to help up to 10,000 entrepreneurs across the UK access funds to start a venture).

Digital publications being subject to VAT

From December 1st 2020, books, newspapers, magazines and academic journals, offline and online, will have their VAT completely removed..

Notching up the Use of Home allowance

From next month, the flat rate claim for working from home will increase from £4 per week to £6 per week.

Increasing National Insurance thresholds

To save the typical self-employed person £78 in 2020-21, the government is raising the threshold at which the self-employed start paying NICs to £9,500 from next month, before it eventually rises further – to £12,500.

Scaling up Time To Pay

HMRC will set up a new dedicated helpline for self-employed people concerned about paying their taxes due to the coronavirus. Up to 2,000 call handlers at the tax office will man the phones, offer guidance and provide deferred payment timetables for freelancers and other taxpayers affected by COVID-19.

Expanding IP hubs

The government is injecting £13m to expand the British Library’s network of Business & Intellectual Property centres.

Investing in broadband

Individuals who work for themselves “in rural and hard to reach areas” are told under Budget 2020 that they will benefit from a £5billion commitment by the chancellor to rollout gigabit-capable broadband.  

Freezing duties

Potentially helpful for freelancers who have to drive to their clients, Mr Sunak said he would not increase fuel duty. And astonishingly unhelpful for freelancers who have to drive to their clients, the chancellor said he would freeze all alcohol duties!

Gig economy tries to hold on to workers during shutdown, (Financial Times)

Gig economy companies have spent much of their existence denying that people who are classified as independent contractors, rather than employees,should be entitled to mandatory benefits.  

But with the gig economy providing a now-indispensable service during the coronavirus crisis, those same companies have scrambled to produce health “benefits” where previously there were none. 

To keep hold of their labour, gig companies are trying to convince workers on the “frontline”, as it is increasingly being described, that they will be looked after if they fall sick and cannot do shifts. But workers and unions say the measures so far are not enough. 



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