Is IR35 Going Away? The Future of IR35 Explained

The Question Contractors Keep Asking

Every few years, the same question resurfaces:

Is IR35 finally going away?

It’s asked after elections. After consultations. After policy reviews. After headlines hint at reform.

And it’s understandable. IR35 is unpopular, complex, and widely criticised. But hope and probability aren’t the same thing.

This article looks at the realistic future of IR35, not the wishful one.

A Short History of IR35 “Almost Being Repealed”

IR35 has survived:

• Multiple governments

• Public sector reform backlash

• Private sector reform delays

• Policy reviews recommending change

At various points, repeal has been:

• Considered

• Promised

• Floated

• Quietly abandoned

Each time, IR35 has remained, sometimes altered, but never removed.

History matters here, because it reveals political behaviour, not just policy intent.

Why IR35 Is Politically Hard to Remove

IR35 exists for a simple reason: revenue protection.

From the government’s perspective:

• Employment taxes fund public services

• Boundary-blurring creates tax leakage

• Enforcement is politically defensible

Removing IR35 would require:

• Replacing lost revenue

• Explaining why employment-like arrangements are taxed differently

• Reintroducing a system HMRC struggled to police previously

That’s a difficult argument for any government to make.

Reform vs Repeal: The More Likely Path

If IR35 changes again, history suggests reform, not repeal.

Reform typically focuses on:

• Who carries responsibility

• How determinations are made

• Administrative burden

• Clarity of process

Repeal would require a fundamental rethink of employment taxation, not just contracting.

That’s a much bigger project.

Why Reviews Rarely Lead to Abolition

IR35 reviews often conclude that:

• The policy is flawed in execution

• The principle is sound

• Enforcement needs improvement

This leads to tweaks rather than abandonment.

From HMRC’s perspective, the problem is not IR35 itself, it’s compliance and enforcement.

And that distinction matters.

What Contractors Often Misread About Political Signals

Contractors understandably latch onto:

• Pre-election rhetoric

• Business-friendly language

• “Red tape reduction” promises

But IR35 rarely sits at the top of political agendas.

When priorities shift to:

• Inflation

• Healthcare

• Infrastructure

• Defence

IR35 becomes background noise, not a flagship reform.

The Role of HMRC in IR35’s Longevity

HMRC has invested heavily in:

• IR35 enforcement teams

• Data analysis capability

• Compliance campaigns

That infrastructure doesn’t disappear easily.

Once enforcement capacity exists, policy tends to persist even when unpopular.

Could IR35 Be Softened?

Yes. And it already has been, in practice.

Signs of softening include:

• Increased focus on reasonable care

• Criticism of blanket determinations

• Emphasis on working practices over tools

But softening doesn’t mean removal. It means refinement.

What Contractors Should Plan For (Realistically)

The most realistic assumption is this:

IR35 will remain, but continue to evolve.

That means contractors should:

• Understand status mechanics

• Keep evidence current

• Avoid relying on political change

• Build flexibility into career plans

Planning for repeal is speculation. Planning for persistence is strategy.

Why “Waiting It Out” Is Risky

Some contractors delay decisions hoping IR35 will disappear.

That often leads to:

• Missed opportunities

• Poor contract choices

• Reactive decisions under pressure

Those who adapt, rather than wait, tend to fare better, regardless of policy shifts.

A Better Question to Ask

Instead of asking “Is IR35 going away?”, ask:

How resilient is my contracting model if it doesn’t?

That question leads to:

• Better negotiations

• Smarter structuring

• Less anxiety

And ironically, more independence.