Major contractors have been auditing freelancers employed via personal service companies as thousands of professionals are braced for a move back to PAYE.

Current rules allow workers to be employed via a personal service company (PSC) which determines whether IR35 tax rules should apply.

That responsibility was due to shift from April to contractors who will determine employment status.

Freelance workers feared losing out through higher tax payments while contractors would also face bigger bills from direct employment.

Steve Barclay, the chief secretary to the Treasury, confirmed the move in Parliament on Tuesday night.

The move to April 6 2021 was a “deferral, not a cancellation and the government remains committed to reintroducing this policy.