Tax plans for contractors are shelved

The government has shelved plans to clarify confusion surrounding personal services company taxation for up to five weeks, leaving the fate of as many as 66,000 small businesses hanging in the air.

With some personal services companies already delaying signing contracts beyond next April because of the confusion, the profession reacted angrily to the latest delay.

Accountants and tax advisers – who argue the crackdown on employees masquerading as contractors will hit legitimate businesses too – had expected an announcement this week.

But a Treasury spokesman said an announcement was not now expected for ‘four or five weeks, or even longer’. Paymaster General Dawn Primarolo is on holiday, as is Sarah Walker, the Revenue official dealing with the issue.

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