World News – UK – Private Sector Reforms IR35: Hays urges Treasury Department to postpone April 2021 start date by one year

Recruiting firm Hays has written to the Treasury to request that the introduction of private sector reforms IR35 be postponed for another year Companies are already struggling to cope with the ongoing consequences of the Covid-19 pandemic

In the letter of 23 February 2021, Finance Secretary Jesse Norman will be urged “to consider urgently” postponing the start of reforms in April 2021 for a year as the pandemic continues to have “material effects”The country’s workforce and companies need further support” in these challenging times

“These reforms should take place on March 6 Going into effect on April 1st, 2020 but was delayed due to the effects of Covid-19 last year, “reads the letter signed by Simon Winfield, Managing Director of Hays UK and Ireland, Confirmed April 2021, there was hope that the economy would be in a better position. Unfortunately this is not the case. We therefore request an urgent review and one year delay ”

At the same time, private sector companies have to grapple with the impact of Brexit, Winfield said, and the added administrative burden of complying with the incoming IR35 amendments is a distraction that companies don’t need this time around

“The impact of Covid-19 has increased in severity and has been combined with the impact of Brexit,” he wrote, “It is more important than ever that UK temporary workers are supported and that companies do not have the added burden of IR35 at the moment businesses are distracted to prepare for the IR35 reforms instead of focusing on either keeping their business going or looking at ways to accelerate their growth ”

With the reforms that took place on June 6, Due to go into effect on April 1st, medium to large private sector companies will take responsibility for determining how the contractors they work with should be taxed based on their work and performance

Currently, it is up to the contractors to decide for themselves whether the working arrangements they have made with their end customers mean that they will be taxed in the same way as a permanent employee (within IR35) or as an unpaid person should workers (outside of IR35)

An inside rule means that the contractor is considered an employee for tax purposes and therefore has to pay the same income taxes and social security contributions (NICs) as a permanent employee, but that workplace benefits – such as paid vacation and sick leave – remain taboo to them

According to HM Revenue & Customs, shifting the responsibility of contractors to determine their tax status will help curb the problem of some individuals trying to purposely classify their obligations as outside of IR35 in order to minimize their payroll tax liabilities

However, business owners and contractors have repeatedly raised concerns about how private sector companies may struggle to cope with the additional administrative burden these changes will place on them

According to Winfield’s letter, Hays’ call for a postponement and review of reforms is supported by both the Confederation of British Industry (CBI) and the Recruitment Employment Federation

“The CBI believes that in order to be a competitive and dynamic market, companies must have access to the skills that will help them generate growth,” the letter said Companies need a bridge to get through Covid-19 and Brexit An example of such a bridge would be a delay in the implementation of the IR35 reforms ”

Hays went on 2 March, the day before the government’s spring budget, with the letter to the public that the contractor community will be watching with interest to see if any planned changes to the IR35 reforms are imminent
The company also confirmed to Computer Weekly that the letter had not received a response from HM Treasury at the time of writing

Hays is far from asking the government to delay introducing the reforms as various parties to the treaty have made similar calls over the past few months

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