In a written tax policy update, https://questions-statements.parliament.uk/written-statements/detail/2020-11-12/hcws572 Jesse Norman, Financial Secretary to the Treasury stated that ‘A technical change to the off-payroll working rules will be made in the next Finance Bill. This will ensure the legislation operates as intended from 6 April 2021 for engagements where an intermediary is a company. The change will correct an unintended widening of the definition of an intermediary, which went beyond the intended scope of the policy.’
Commenting, Dave Chaplin, CEO and founder of compliance solution IR35 Shield, who discovered the original issues and reported them to HMRC says: “It’s encouraging that the Treasury has finally vindicated the conclusions we reached in September, namely that the Finance Act needed changing to cater for umbrellas. Hopefully we will see what those changes are very soon, because firms will be making decisions from January 2021. We will continue to work with HMRC to try and help them resolve this issue.”
Commenting, Crawford Temple, CEO and founder of Professional Passport, the largest independent assessor of payment intermediary compliance said: “We welcome the Government’s intention to update the Off-Payroll working rules in the next Finance Bill. The errant clause that was pointed out by Dave Chaplin of IR35 Shield would have posed problems for umbrella firms and the entire supply chain. The new legislation that is set to go ahead in April 2021 will mean that more contractors will be seeking to work through umbrella models, allowing them to continue working on temporary assignments whilst enjoying all the employment rights and benefits that come with employment.”
