April is over already. Although some things remain the same – we’re still social distancing and the threat of coronavirus remains ever-present, the industry was abuzz with new developments.
In case you missed what’s been happening over the last month, we’ve put together another contractor-focused news roundup.
House of Lords push for IR35 rethink
The House of Lords published their report into IR35 and deemed the legislation ‘riddled with problems, unfairnesses, and unintended consequences’. As a result, they have recommended that the government ‘completely rethinks’ the rules.
The Lords urged the government to rethink the reforms and to announce in six months’ time whether they will reintroduce the proposals. This push comes just a month after the government announced that they were to delay the off-payroll reforms for 12 months as a way to minimise the impact of the COVID-19 pandemic on the economy and assured the self-employed workforce that this was merely a deferral, not a cancellation.
Whilst this report provides compelling arguments against the IR35 reforms, there is still no confirmation that the government will take this into consideration.
Bounce Back Loan Scheme (BBLS) unveiled
On 27th April, the Bounce Back Loan Scheme (BBLS) was announced as a measure to help small and medium sized business access finance. The government-backed loans are available from 4th May with the hope that this will encourage more lenders to help.
The scheme allows businesses to borrow a 25% of their turnover up to £50,000 over a maximum of 6 years. The government will pay interest for the first year, and the rate is fixed at 2.5% throughout the term. There will be no repayment penalties charged.
Company insolvencies down by a third
According to research by KPMG, company insolvencies fell by a third in April, compared to the previous year. Research found that in March, 135 companies went into administration compared to 116 in the previous year. However, April’s figures revealed that this year, only 61 companies were made insolvent, compared to 91 the year before.
This drop could, in part, be due to the support packages offered by the government to deal with the coronavirus pandemic. Although these figures are promising, KPMG stressed the importance of forecasting for the long term and ‘embedding as much of the cost-saving gains made in their initial crisis response as possible into their day-to-day operations’ where possible.
HMRC to pause tax checks, but continue with Loan Charge settlements
HMRC have suspended all corporation tax and VAT checks to allow themselves some breathing room in dealing with COVID-19. However, this 30-day break does not include activity relating to the 2019 Loan Charge Scheme, and checks are still going ahead.
The All Party Parliamentary Group (APPG) pushed HMRC for a response, who stated that although they understood the difficulties at present, they were unable to stop pursuing anyone who had provided details of their involvement with the scheme. These measures have been deemed unfair in the current climate, with a Loan Charge Action Group member describing their approach as ‘disappointing’.
Stay up to date
Things are changing quickly at present, so it’s important to stay up to date with the latest development. We’re here to help you up to speed with all of the latest coronavirus information as it occurs, that’s why we’ve been keeping our blog updated with all of the latest announcements.