With major reforms on the horizon – including new umbrella company legislation set to take effect in April 2026 and the ongoing debate around a potential single worker status in the forthcoming Employment Bill – businesses are bracing for further disruption to the flexible workforce market.
Yet amidst this uncertainty, IR35 is now proving to be a safe haven.
Dave Chaplin, CEO of IR35 tax compliance firm IR35 Shield, said, “Eighteen months ago, the Public Accounts Committee (PAC) warned that HMRC’s “tough approach” was deterring companies from using contractors. Today, the environment is starting to look very different.
“The dust has now settled on IR35. The Supreme Court clarified the legal principles a year ago, the offsets fix in April 2024 has removed disproportionate risks, and HMRC’s compliance teams are acting reasonably. Firms are passing checks quickly and cleanly, giving them the confidence to hire contractors again.
“It’s clear HMRC has listened and the risks for businesses have been dramatically reduced. Against the backdrop of new employment and umbrella reforms, IR35 is the one area where firms can now hire with certainty.
“For the first time in 25 years, IR35 is seen to be working in practice. My advice to policymakers would be to avoid tinkering with tax and let the stability hold – especially now, when businesses need certainty more than ever.”
