Following The House of Lords IR35 inquiry, it’s Economic Affairs Finance Bill sub-committee have urged the government to use the one year delay to the implementation of the Off-payroll working legislation, caused by the COVID 19 virus, to “give serious consideration to the fairer alternatives”.
The sub-committee, in their ‘Off-payroll working - treating people fairly report’, suggested that the IR35 framework is “flawed” and had never worked satisfactorily in the 20-year history.
The sub-committee went on to call upon the government to confirm by October 2020, whether it plans to implement the new rules. But in the second reading of the Finance Bill 2020-2021, the government intention was to include an amendment enacting the private-sector off-payroll regime in the current bill. A resolution to include this amendment had to be pulled from the agenda, due to Parliament’s inability to vote remotely.
The Lords also criticised the government for failing to listen to concerns raised by stakeholders.
Many of these concerns along with descriptions of blanket employment status determinations and early termination of contracts had led the Lords to conclude that the changes will trigger widespread disruption.
With the UK facing a some difficult economic decisions ahead, the Finance Bill committee encouraged the government to consider these problems during the next year leading up to April 2021, especially as businesses as a whole may need a lot longer than a year to recover.
The committee concluded that, “The severity of the economic impact of Covid-19 is so great that it would be completely wrong for the government to impose a new burden on business in the form of the existing off-payroll proposals,”.
It appears that it may not be over yet!