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COVID-19 postpones off-payroll extension to the private sector

19th March 2020

The Government has delayed extending the controversial off-payroll working rules to the private sector, as the UK fights to contain the coronavirus pandemic.

Hot on the heels of announcing a £350 billion support package for struggling businesses, the Treasury pulled the plug on the extension less than three weeks before it was due to kick in.

Last month, the Treasury confirmed plans to press on with the extension which would see medium and large private-sector firms responsible for setting the tax status of any contractor they use from April.

The rules will now apply from 6 April 2021.

The rollout of the reforms was deferred in response to the ongoing spread of COVID-19, in an attempt to help businesses and individuals.

The 12-month delay was announced in the House of Commons by chief secretary to the Treasury, Stephen Barclay.

Barclay said:

"This is a deferral not a cancellation and the Government remains committed to reintroducing this policy."

Michael Steed, co-chair of Association of Taxation Technicians' technical steering group, said:

"This is a pragmatic and sensible decision given the highly uncertain times and unprecedented challenges which both businesses and HMRC face because of COVID-19.

"We hope this will, once the situation with COVID-19 improves, allow HMRC more time to address concerns over these rules and extend their education and support."

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