The House of Lords has produced a damning report into the intended changes to the IR35 off-payroll working rules.

In response to the coronavirus pandemic, the reforms have been delayed by the government, which says the move is a ‘deferral and not a cancellation’. They are now anticipated to take effect on 6 April 2021.

Following an inquiry into the deferred changes, however, the House of Lords Economic Affairs Finance Bill Sub-Committee has urged a complete rethink of the rules, describing them as being ‘riddled with problems, unfairnesses, and unintended consequences’.

The IR35 changes will make all medium and large private sector businesses in the UK responsible for establishing whether contractors who are working for them should be classed as employees for tax purposes.

The Lords have implored the government to announce in six months’ time whether it will proceed with reintroducing the proposals in 2021.