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Contractor Employment, Tax Rules Delayed in U.K. Over Virus

March 18, 2020, 12:54 PM

The new coronavirus outbreak has pushed the U.K. to pause its plans to expand rules on the employment status of contractors in the private sector.

  • The one-year delay is meant to ease pressure on businesses during the Covid-19 pandemic.
  • The “off-payroll” rules, known as IR35, aim to ensure that contract workers pay about the same tax and social security contributions as regular company employees.
  • The rules first applied to public sector employers in 2017 and were being expanded to cover private sector employers starting April 6, 2020. The rules will now take effect April 6, 2021.
  • At the urging of businesses in the U.K., the government had already agreed to be lenient in applying new rules for contract workers by waiving penalties for the first year the rules apply.
  • However, the government acknowledged that companies will face significant disruptions from the coronavirus and has given companies the additional year to prepare for the changes.

To contact the reporter on this story: Hamza Ali in London at hali@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Rachael Daigle at rdaigle@bloombergtax.com

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