Off-payroll working reforms have been delayed until April 2021, less than a month before they were due to be implemented.
The changes come about as part of the government plans to support businesses and individuals during the coronavirus pandemic.
Frances Lewis, sector expert from international law firm Osborne Clarke said: "At one level this is clearly good news. Many organisations were struggling with making the necessary changes and the impact of COVID-19 was clearly not helping this. Many personal service companies (PSC) contractors will face less immediate uncertainty about their incomes.
"Alongside this, many end users and suppliers will now have time, where appropriate, to properly implement engagement models which fall outside the new regime or adopt more streamlined and automated processes for assessing the status of PSC contractors.
"However, many suppliers and users of the services of PSCs have understandably already taken action to deal with the expected commencement of the new rules. It may not be a simple exercise to go back to their previous approach to supplying and engaging PSC contractors. "
Off-payroll working rules, known as IR35, were introduced in 2000 to ensure that someone working like an employee, but through their own limited company, pays broadly the same tax as someone employed directly.
The reforms are designed to tackle non-compliance with the off-payroll working rules and make medium and large organisations responsible for determining the tax status of contractors and ensuring that the right employment taxes are paid.
The move to delay the reforms has been welcomed by many self-employed workers.
Andy Chamberlain, Director of Policy at IPSE (the Association of Independent Professionals and the Self-Employed) said: “The government has done the sensible thing by delaying the changes to IR35 in the private sector.
"It is right and responsible to delay the changes to IR35 for at least a year during the Coronavirus crisis, to reduce the strain and income loss for self-employed businesses.
“This is a sensible step to limit the damage to self-employed businesses in this grave and unprecedented situation, but we also urge the government to do more. It must create an emergency Income Protection Fund to keep the UK’s crucial self-employed businesses afloat.”
The new introduction date will be legislated in the upcoming Finance Bill.