The IR35 reprieve is over – what freelancers should do now

The government delayed introducing IR35 tax reforms for freelancers amid the Covid-19 chaos. But they come into effect early next month.

Freelancers and contractors got a last-minute reprieve from the IR35 reforms a year ago, when the government opted to delay introducing them on 5 April 2020 amid the Covid-19 chaos. But the reprieve was only temporary, and for many businesses, concern is now growing about the potential impact of the changes when they come into effect early next month.

The reforms make businesses that use freelancers and contractors responsible for determining their tax status – whether they really are self-employed contractors, or whether they are effectively employees that should be paid through the PAYE tax system. Many freelancers and contractors have received lengthy questionnaires from clients in recent weeks, and fear they could face a loss of income or higher tax bills following the changes.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.