2020 has been a very confusing and chaotic year for almost everyone. The pandemic has been a major challenge for those who are self-employed, and the lack of government support offered to all of the self-employed in the UK for all of 2020 has not helped matters. For many, this will be one of the worst years of all time, both in terms of personal freedoms and income.
The only small bright spot for contractors during this fraught year was the postponement of IR35. However, despite ongoing struggles related to the pandemic and a vastly reduced economy, IR35 is still going to be rolled out in March of 2021. Contractors are starting to batten the hatches for the coming year, rightly concerned about what is to come.
The first sign of real trouble to come from IR35, happened in February when Eamonn Holmes lost to HMRC in his tribunal and was asked to pay £250,000 in tax liability. HMRC called it a win, but contractors everywhere were now concerned, correctly worrying that this victory was going to set a precedent for all those who were working on the kind of contracts that had historically been ironclad.
The next blow to contractors came in the form of blanket bans done by many major sectors with historically engaged contractors. For those who were affected, there was no way to mount a defence and the blanket bans, which are not supposed to be allowed, have continued to stand ever since. Clearly, HMRC will not be defending contractors, even when they are required to.
House of Lords Review
The House of Lords report released after their investigation into IR35, renewed contractor hopes that something would be done about the unfair legislation. However, despite the damning report, the government has made no move to change anything about it and has proceeded as if nothing was said to them about a need to review IR35.
The rollout has basically been determined to be set in stone at this point, and the only concession that has been made is a small change which was rolled into the Finance Bill related to clarification of a few points. HMRC has continued to target high profile presenters and others who will make a big splash in the news, and they have had mixed results.
Reopened Inquiries
HMRC has decided to reopen IR35 inquiries following the pandemic, but there have not been many indications that they will be much more reasonable. Business as usual seems to be the HMRC’s plan going forward. The CEST tool has never been improved and continues to provide unreliable results for contractors and end-users.
Contractors can only hope that their engagers will be prepared for IR35 by April of 2021. They can prepare themselves by self-education and ensure that all of their existing contracts meet the new requirements that will come into play in April. There is nothing else to be done at this time, and contractors should probably give up any hope that the government will see reason before April.
