Blanket bans v blanket determinations: what the ‘IR35’ is the difference?

Misunderstood. Misinterpreted. Misinformed. Kingsbridge sets the record straight on three flavours of the same thing; all making PSCs wince. 

As IR35 advisers, we frequently encounter two phrases that are often misunderstood and misinterpreted. 

The two troublesome phrases, central to the off-payroll working (OPW) rules, are: 

1. IR35 blanket bans 

2. IR35 blanket determinations

IR35 blanket bans? Meaning differs depending on who you ask 

Well, what is an ‘IR35 blanket ban?’ And, writes Matt Tyler, IR35 Consultancy Manager at Kingsbridge, what do contractors, agencies and clients mean when they use this term?   

It’s a pertinent question because there’s been a right ding-dong on LinkedIn about it, pressing the buttons of impassioned contractors, advisers who maybe should know better, and uninformed virtual passers-by who’ve added to the misinformation. 

For the avoidance of doubt, let’s first restate 1), above, and define it: 

What is an IR35 blanket ban? 

Typically, if only these three words are used and not the ‘d-word’ (see next section), “IR35 blanket ban” refers to an outright ban on the intake or engagement of personal service company (PSC) contractors. 

In other words, an IR35 blanket ban is a policy, in force across the board, of refusing the usage, or recruitment, of contractors who operate via their own limited company.  

Who decides on an IR35 blanket ban? 

An IR35 blanket ban is usually a client’s decision.  

And by ‘client’, we mean the party in final receipt of the contractor’s services, i.e. for whom the contractor works and is ultimately remunerated by. 

Are IR35 blanket bans fair, and why ban PSCs at all? 

Boiled down to its most basic level, an IR35 blanket ban is a staffing preference or business-resource choice by a client.  

And it’s well within their gift to make.  

Clients ban limited company contractors (or PSCs) for several reasons.  

But the primary benefit for the engager is that non-acceptance of PSCs avoids ANY risk whatsoever for the client under the off-payroll working rules.  

HMRC liability is the reason for IR35 blanket bans 

Crucially, under the OPW rules, the HMRC liability that arises from getting IR35 status wrong sits, typically, with the engager. 

We saw many public sector bodies in the run-up to the public sector rules (06/04/17) and private sector businesses in the run-up to the private sector rules (06/04/21), take this risk-averse approach. 

The most likely clients to have IR35 blanket bans in force are…

IR35 blanket bans were the ‘go-to’ for large organisations, particularly those with potentially significant exposure and small risk appetite for engaging with contractors.  

The Financial Services industry (banks and financial institutions) was a prolific ‘blanket banner’ of PSCs. 

Disadvantages of banning limited company contractors 

Most contractors don’t like hearing the cold hard truth here – that a ‘blanket ban’ on PSC contractors is perfectly legitimate. But in fairness to their groans, an outright hiring veto on PSCs does bring some negatives to the client’s door.  

For example, our own research (as an IR35 insurer) and other studies have shown that banning PSCs can lead to a loss of talent. It also leads to a narrower talent pool for the client, or their agencies, to select from.  

PAYE, NICs and HMRC 

An IR35 blanket ban also increases the costs of engaging with talent, given that PAYE and National Insurance Contributions will be due per permanent, replacement hire.   

Yet crucially, those who ban PSCs face no implications whatsoever under the OPW legislation, because Chapter 10 rules simply do not apply if limited company workers are not engaged. For a more technical explanation in HMRC-speak, try ESM10003. 

What is an IR35 blanket determination? There are two types… 

There are two types of ‘IR35 blanket determinations’, also known as ‘IR35 blanket assessments’, that we see in 2025/26:  

1. ‘Blanket determinations/assessments’ – are where all PSC/limited company contractors are determined to be ‘inside IR35’ without due consideration given to any of the individual contractors’ circumstances. In theory, a blanket determination could be the other way around, i.e. all PSCs ‘outside IR35’. 

2. ‘Role-based blanket determinations/assessments’– are where all PSCs in a certain role receive the same IR35 status determination because they all operate in, materially, the same manner. Frequently, clients assess one role and apply its IR35 status to all similar roles, typically categorising them as ‘inside IR35’. 

What is Kingsbridge’s view of IR35 blanket determinations? 

Taking 1) first, our view is that the practice of blanket determinations/assessments is totally unacceptable when determining IR35 status.  

And ‘determining’ or ‘determination’ is the ‘d-word’ I mentioned earlier. 

When looking to assess IR35 status, the decision-maker needs to make sure that the nuances of one worker to another are captured and assessed on their own merit.  

The ‘reasonable care’ question  

If a client ignores facts like the contract and working practices and then decides that all workers are ‘inside IR35’ (or ‘outside IR35’), it could be argued that the client is not taking ‘reasonable care’ which is what HMRC expects clients to be able to demonstrate.  

HMRC’s stance on this is clear. And IR35 blanket determinations/assessments are their first example within ESM10014 of instances that do NOT constitute ‘reasonable care’ – a requirement under the OPW legislation. 

What does HMRC say about IR35 blanket determinations? 

The example in the HMRC Employment Status Manual (ESM) states: 

“[A medium-sized company]…elects to simply determine that all workers who provide their services through a PSC will be caught by the new rules, because they undertake similar roles and are engaged under similar terms and conditions.  

“It does this, believing that this will protect it from any liability to pay tax and NICs on payments to those workers. The client passes the same SDS to every worker and the agency.” 

HMRC’s ESM contains potential points of ‘blanketing’ confusion  

It is noteworthy that HMRC says “because they undertake similar roles and are engaged under similar terms and conditions”. This wording from HMRC sounds remarkably like 2) but, technically, it isn’t the same. And the subtleties that separate 2) i.e. ‘compliant’ role-based blanket determinations/assessments, and 1) ‘non-compliant’ blanket determinations/assessments can be easily overlooked. 

Kingsbridge’s guidance on role-based blanket IR35 determinations 

Taking a closer look at 2), it’s quite clear to us that there is nothing wrong with a determination of a given role or discipline.  

But to clients with a history of role-based blanket determination/assessments, we’d caution them in the future:  

You have to be absolutely certain that the PSCs within the role or executing it are operating under the identical terms and conditions – both written and in practice.  

If any circumstances differ between the PSCs, a role-based determination may not be suitable for all (‘blanket’), and those PSCs should probably be assessed separately on their own merit.  

What does HMRC state about blanket determinations under the OPW rules? 

HMRC’s guidance here notes that: 

“A blanket determination is where a determination is made for a group of workers who have different terms and conditions or working practices, without considering their individual circumstances. For example, deciding that all off-payroll workers are deemed employees, without considering the circumstances of the engagement.” 

Decoding HMRC’s three ‘blanketing’ clarifications 

HMRC clarifies that: 

“A blanket determination is not: 

1. a client deciding to move all its off-payroll workers across to direct employment. 

Decoded by Kingsbridge: This is effectively an ‘IR35 blanket ban’ – referred to at the very top of this blog.

2. a client deciding that all their off-payroll workers should be engaged through umbrella companies that treat them as employees. 

Decoded by Kingsbridge: This is also, in effect, an ‘IR35 blanket ban’.

3. a role-based determination, where all workers are under the same contractual terms and working arrangements. 

Decoded by Kingsbridge: This is 2), above, and as much as contractors might not like it, it can be a legitimate practice (providing the ‘sample’ determination is accurate, and suits the circumstances).

Does HMRC accept blanket determinations? 

Interestingly, the HMRC guidance adds: 

“HMRC do not accept blanket determinations. A client that has applied blanket determinations will not have taken reasonable care in making its determinations. We may consider the use of blanket determinations as deliberate behaviour when considering the penalty position.” 

If only it were LinkedIn users struggling with IR35 & blanketing… 

It’s quite easy to confuse an ‘IR35 blanket determination’ with an ‘IR35 blanket ban,’ and to confuse either of those with a ‘blanket role-based determination.’  

Indeed, it’s not just LinkedIn users who we see struggling with these three.  

And we get it, it can be confusing because at a surface level, they are three flavours of the same thing – flavours that make contractors wince. 

But there are subtle differences between the three of them that significantly affect how workers in each situation are treated.  

And finally, different levels of wince would be appropriate 

Related, while ‘blanket role-based determinations’ don’t always win the clients who make them many friends in the contractor community, it’s probably the best of the bad bunch. 

The affected workers should have access to a Client-led Disagreement Process (CDP), which means the Status Determination Statement (SDS) can at least be challenged. To what end, or to what effect, that challenge is made is a whole different blog. 

Getting support with IR35  

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