As a further reaction to the economic fallout that will result from the Covid-19 pandemic, it was announced last night, 17 March 2020, by the chief secretary to the Treasury that the extension of the off-payroll working regime to large and medium sized businesses in the private sector will be postponed for a year until April 2021.

While a welcome deferral of a controversial piece of legislation, it was made clear that it is only intended as a postponement and not a cancellation.

Further, given how close to the April 6 start date this announcement has come, many businesses who have already revised their working practices to cater for these changes are likely to persevere with them.  To revert to the previous operating methods only to reverse them again for next April is potentially too much upheaval to businesses already under pressure from those wider economic storms.

For those who had not yet adapted, there is now a bigger window in which to refine their operations, coupled with a release from an imminent compliance headache.  While HMRC’s announcement last month of a “light touch” on penalties for the first year would have helped, it didn’t address interest on late payments. A complete deferral of the regime’s introduction buys much needed time for many.

While the business focus over the foreseeable future will be on survival above all, it is to be hoped that this deferral will allow time for those affected by the new rules to make better preparations for its relaunch in April 2021 and, perhaps, even for Government to reflect upon the merits of its introduction at all.

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