"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.""
Upcoming reforms include new umbrella company legislation taking effect in April 2026 and debate over a potential single worker status in a forthcoming Employment Bill, prompting businesses to expect disruption in the flexible workforce market. Despite uncertainty, IR35 has become a stable option for hiring contractors. The Supreme Court clarified legal principles a year ago, and an offsets fix in April 2024 reduced disproportionate risks. HMRC compliance teams are acting more reasonably, with firms passing checks quickly and regaining confidence to hire. Stakeholders advise policymakers to avoid further tax changes to preserve employment stability and certainty.
Read at London Business News | Londonlovesbusiness.com
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