Coronavirus: Residential Property, Commercial Property and IR35


Residential tenants can apply for a three-month payment holiday from their landlord. As per the government’s announcement on 18 March 2020, no one can be evicted from their home or have their home repossessed over the next three months. The Residential Landlords Association and the National Landlords Association both reassuringly welcomed the news.

In turn mortgage borrowers (who are individuals) can apply for a three-month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don’t pay as a result of the payment holiday and that interest will continue to be charged on the amount they owe.

In practice:

  • Tenants should continue to pay rent where possible.
  • Should a tenant fall in arrears, it is up to the landlord and tenant to come to a sensible agreement. The Tenancy Agreement and evidence of hardship can be used as a basis for agreement.
  • Where the three-month month payment holiday doesn’t apply, lenders may not be sympathetic and so if tenants withhold payments of rent, landlords will have to take action to recover it.
  • Landlords would face practical hurdles in finding a new tenant in this current climate, not least because the government is advising the public to, where possible, “delay moving to a new house while measures are in place to fight coronavirus”.


Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction, the government announced on 23 March 2020. This protection may however encourage tenants not to pay rents for the coming quarter or to seek reductions. A corresponding relief may be needed to protect landlords from their lenders.

In practice:

  • Rent is due and remains governed by the lease agreement.
  • Landlords and tenants are already having conversations and reaching voluntary arrangements about rental payments.
  • An issue for property businesses is likely to be cashflow. Tenants may not be paying in full, while lenders are still requiring interest payments to be made. Property developers will likely be unable to sell property in the current climate.
  • Businesses can access funding through, for example, the “Coronavirus Business Interruption Loan Scheme”. The scheme has been designed precisely for the purpose of enabling businesses to continue meeting overheads such as rent.
  • Landlords would more-likely-than-not face even higher hurdles in finding a new, good-quality tenant in this current climate.


The Government has announced that it will be deferring new rules affecting contractors working for the private sector, directly or through an agency, that were due to come into force from 6th April 2020 until 6th April 2021.

The changes which would have affected all contractors working for medium or larger organisations, had initially been confirmed in The Budget.

The chief secretary said: ‘I can also announce that the government are postponing the reforms to the off-payroll working rules IR35 from April 2020 to 6 April 2021. The government will therefore not move the original resolution tonight, but it will shortly table an additional resolution confirming that we will reintroduce the off-payroll working rules provisions by amending the Bill, with a commencement date of the 6 April 2021. This is a deferral in response to the ongoing spread of covid-19 to help businesses and individuals. This is a deferral, not a cancellation, and the government remain committed to reintroducing this policy to ensure that people who are working like employees, but through their own limited company, pay broadly the same tax as those employed directly.’

What you should do next
The impact of this deferral will depend on your circumstances and actions taken to date by the company or agency you work for, but generally you should consider:

  • Reviewing the actions, you have taken and see if these are impacted by the deferral. For example, if you have started an insolvency process on the basis that you no longer need your company you may need to defer this.
  • Talking to the organisation you work for to see if the deferral has/will change their approach.
  • Reviewing any determinations sent out by your agency or firm in anticipation of the change. The deferral will mean that you will be responsible for determining whether your contract is inside or outside IR35 for a further 12 months.
  • Most importantly, talking to your accountant. The Government is issuing guidance regularly as it tries to keep pace with the current situation, meaning a review of your own circumstances is more important than ever.

If you would like to discuss how the IR35 changes or the coronavirus pandemic may affect you or your business, please do not hesitate to contact us on 020 8952 7717 or use our online enquiry form.

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