What’s wrong with HMRC’s Employment Status research

Five reasons why the Herculean effort required to read the Revenue’s Employment Status research probably isn’t worth it.  

You’d think a contractor insurer’s IR35 Consultancy Manager – that’s me – would change their Saturday night plans to read research from HMRC on employment status.  

And usually, you’d be correct. 

But new research released by the Revenue on May 27th 2025 comes perilously close to doing the word ‘research’ a disservice.  

Five flaws in HMRC’s ‘new’ Employment Status research 

Unfortunately, Research & Analysis: Employment Status in the UK is out of date, is unrepresentative, and is unreflective of status determinations today in 2025-26.  

While this ‘unreflective’ point probably bothers me the most about this status research, there’s a fourth and fifth problem with the research.  

In particular, its accessibility is poor, and so too is its ‘use case’.  

Three other questionable pieces of HMRC status research 

Before I come to these five flaws in the HMRC research, a reminder is in order. 

HMRC has ‘form’ here. 

• A 2020 off-payroll working (OPW) study by HMRC (Qualitative research with contractors providing services through a Personal Service Company) was widely acknowledged to be unreliable and lacking rigour. It was based on interviews with just 30 PSCs. 

• A December 2022 study into the impacts of the 2021 off-payroll working reforms in the private and voluntary sectors has been described by advisers who specialise in IR35 as questionable and wide of the mark. Even HMRC cautioned readers that they “should take the estimates set out in this publication as indicators only”. 

• A 2025 study updating the 2022 “impacts” study of the OPW rules in the private and voluntary sectors downplayed the effects on personal service companies (PSCs), such as minimising the financial fallout, skimming over the exploitation of displaced PSCs, and claiming a reduction in disguised remuneration schemes. It also ducked estimating how widely the IR35 rules have been misapplied, such as through ‘blanketing’ and failure to take reasonable care. 

This HMRC study gives off strong ‘I must be missing something’ vibes 

Based on the two-and-a-half hours I invested in it (only to feel the need to start over due to that nagging feeling that I must be missing something), I believe HMRC’s “Employment Status in the UK…” research sets a new low.  

It’s a lower, unenviable bar that no research should strive to sink to. 

Whose research is ‘Employment Status in the UK 2023?’ 

For full transparency, this was and is ‘HMRC’s research’ insofar as HMRC: 

a) commissioned a survey (carried out by researchers at the National Centre for Social Research/NatCen) 

b) then undertook some qualitative research (the findings of which were “prepared by HMRC in collaboration with NatCen, based on a presentation of final findings prepared by NatCen for HMRC”)

Caution, length, and my own executive summary 

Confused? I caution you. That sort of explanation is just the start of not being able to make head nor tail of either the HMRC-commissioned survey (29,000+ words) or the qualitative research (11,000 words). 

Many corporate and research reports start with an ‘Executive summary’. For both the survey and qualitative research, my executive summary would probably be: 

HMRC has difficulty figuring out an individual’s status 

In fairness to the Revenue, everyone else in the employment status market would probably agree that status isn’t easy.   

Yet did taxpayers need to fund a 41,000-word piece of research (comprised of one full month of online, phone and fieldwork interviews of 8,000+ people, further to an additional 19 in-depth interviews), just to echo what status experts have been saying since day dot?  

No, I don’t think they did either.  

It all makes for a rather expensive echo chamber, doesn’t it? 

Introducing ‘some form of worker’ 

Plus, throughout the ‘research’, HMRC seems to be under the impression that when it’s unclear about someone’s status (which it was in 24% of the overall respondents’ cases), it believes in 55% of instances that the status is “some form of worker”.  

And of these, only a minuscule 6% are “likely self-employed”. That leaves a whopping chunk – 38% – remaining uncertain.  

Why HMRC feels the need (in this research) to have two categories of “probably a worker” is a mystery to me. Surely either someone IS or IS NOT a worker?  

Undetermined status plagues 1 in 3 UK individuals, apparently 

The “fairly likely” label that the HMRC-commissioned research comes up with smacks, to me, of ‘indeterminate’. If I’m correct, that would bump the “undetermined” category up to well above the previously stated 38%. Not that more than 1 in 3 individuals being ‘undetermined’ isn’t worryingly high on its own. 

The above shortcomings with this HMRC Employment Status research are in addition to the five I opened with. 

So, without further ado… 

Five flaws in ‘HMRC’s Employment Status research: survey and qualitative research’ 

1. Unrepresentative and unhelpful  

Although logistically it’s probably next to impossible to run a methodological survey of a significant number of individuals, my view is that the UK jobs market is infinitely more complex than a sample size of 8,767 people.  

That’s how many people HMRC instructed NatCen to quiz. 

Worse, this inadequate sample number dwindles to around just 2,100 people, once the ‘clearly defined’ and ‘irrelevant’ category respondents are struck out. 

In the balmy pursuit of research that teaches us all something new, HMRC should have been more focused on a particular question or questions. 

Walnuts, ham, and Hercules 

The Revenue could have got laser-like on two or three ‘worker status’ issues, and approached them with scalpel precision rather than its preferred sledgehammer-to-crack-a-walnut approach.  

What we’re left with feels like the effects of researchers scrambling to try to interview as many people in a month as was feasibly possible. It all seems fairly ham-fisted.  

As a result, the prevailing feeling from status advisers willing to put in the Herculean effort required to read this Employment Status research is confusion about what the purpose of it even is. 

Perhaps my colleague here at Kingsbridge, our IR35 Project Manager Ryan Dawson, made the point best. He said that he’s aware of HMRC’s three stated objectives in the Executive summary under ‘Methodology’, but he still finds the research “devoid of clarity and clear” aims.  

2. Use case – fail 

What will this research be used for? 

This is a question I find myself asking about this research despite, like my colleague, noting down the objectives. 

If HMRC intends to use this research to produce legislation in the future that will affect the UK’s working populace, I worry about what it will bring about.  

I’d probably worry for contractors in particular, as this HMRC employment status study does inherently seem biased against self-employment. 

It seems the Low Incomes Tax Reform Group (LITRG) has worries too about what the Employment Status research could be used for, saying it may spark an HMRC initiative to get more ‘workers’ into the PAYE (Pay As You Earn) system. 

There is a chapter in the qualitative research entitled ‘Recommendations for future surveys on employment status’ which I (and maybe LITRG too), hoped might clear up these use case concerns of the research. 

But I’m still none the wiser. 

3. Unreflective (question set) 

Arguably my biggest bugbear with this UK Employment Status research is that HMRC’s question set is flawed, in terms of premise and approach.  

The questions correctly cover the key tests of personal service and control.  

They include potentially important factors such as ‘In business on your own account’ (or “Enterprise” as they refer to it in the qualitative research). And this in turn would contain aspects such as Financial Risk – which is all fine, but HMRC neglects Mutuality of Obligation (MoO).  

While it’s certainly fair to say that MoO has taken a back foot since the ‘PGMOL’ decision in HMRC’s favour, Mutuality is still a factor that should be considered by workers.  

If HMRC is willing to ask questions about the degree of integration that the individual is subject to at their workplace, I see no reason why they can’t throw a token gesture towards MoO in the question set at the centre of this research. 

4. Unreflective of work and workers today 

The “willpower” that one respected status adviser has said was so depleted that she couldn’t initially read this HMRC research, might not have been sapped so soon had the research been up to date. 

However, as the interviews were conducted as far back as May 2023, the findings are significantly out of date. 

HMRC Employment Status researchers polling workers fresh out of covid? Tick 

While the qualitative research interviews were conducted in August 2024, May 2023 presents a real problem. It was the month that the World Health Organisation finally declared an end to the COVID-19 public health emergency.  

Would you say how you worked at the conclusion of the pandemic was reflective of your normal working practices? Would you say your working practices when the UK tentatively reopened from 227,000 deaths were a reliable indicator of your status?  

I doubt many ‘workers’ would answer these two questions in the affirmative. Nevertheless, this atypical and grim period for the UK is where and when the findings were taken. 

5. User-unfriendliness 

Not only is this HMRC research a reflection of a bygone jobs market, but it’s also monstrously unfriendly to the reader.  

It’s text-heavy, repetitive, overloaded with detail, and strangely structured (the ‘Introduction’ commencing in chapter 3 after a Glossary, for example).  

Despite being on a subject close to my heart, this opaque Employment Status research, telling us very little we didn’t know already, ranks as one of the most soul-destroying reads I can remember.  

Getting support with IR35 

Off the back of this confusing research, contractors and businesses might be left with their heads spinning – on top of navigating IR35 legislation and ensuring compliance! At Kingsbridge we offer tailored support, including expert guidance on IR35 status assessments, compliance strategies, and risk mitigation. Our team is dedicated to helping you understand and adapt to the evolving tax landscape.  

We also offer a range of flexible business insurance options to support contractors, including Professional Indemnity, Public Liability, and Employers’ Liability cover, as well as add-ons like Cyber Insurance and Director and Officer’s Liability.  

To find out more, get a quote or contact us today.