MPs have voted 321 to 232 against delaying the IR35 reforms to the private sector. An amendment was put forward by David Davis MP, the former Secretary of State for Exiting the European Union, proposing a two year delay of the reforms in light of the ongoing Covid-19 pandemic.
The purpose of the proposal to delay was to allow all stakeholders time to understand what the effect of the new IR35 policy will be, with Davis citing the reforms are “riddled with problems, unfairness, [and] unintended consequences”.
Whilst the government position is clear that closing the loop should result in increased tax and NI revenues, there remains strong concerns around the behavioural consequences of the proposed reforms to the labour market and gig economy, as well as the financial cost of implementing the changes. These concerns are not shared by the majority of MPs at this stage however, although further votes and lobbying on the topic are likely ahead of the current reforms going live on 6th April 2021.
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