The government’s controversial IR35 tax reforms have been delayed until April 2021, the Chief Secretary to the Treasury has confirmed.
The reforms clamp down on tax avoidance through businesses who use contractors for effectively the same services as salaried employees.
It comes less than a week after Steve Barclay confirmed the measure would be introduced this coming April.
Mr Barclay confirmed that the decision has been taken as part of the measures outlined by Chancellor Rishi Sunak on Tuesday to reduce the economic impact of Coronavirus.
The Treasury’s Chief Secretary insisted the decision was a “deferral, not a cancellation, and the government remains committed to reintroducing this policy”.
The reforms were widely criticised by freelancers and contractors, with fears they would dramatically affect the livelihood of hundreds of thousands of people in the UK.
Darren Fell, CEO of online accountancy company Crunch, said: “I am relieved for the UK contractors and our customers at Crunch who have been thrown a lifeline with the Government decision to defer the introduction of IR35 to the private sector this April. A good and sensible decision given the extraordinary circumstances resulting from the Coronavirus and steps the Government are taking to try and protect the economy.
“However, we need the Government to overhaul this legislation in the coming 12 months to protect UK jobs and businesses. This needs to be led by an independent authority, something that has been proven following the House of Lords enquiry into off payroll tax.”