Rachel Reeves turns down 'repeal IR35 reform’ opportunity
MP Rupert Lowe tells Kingsbridge IR35 reform must be abolished, despite the Chancellor ducking his ask that all contractors return…
The Keir Starmer-led government looks content with the status quo – quite at odds with the people affected by IR35 (and seemingly almost everybody else).
It’s painfully clear to those of us involved in lobbying that this Labour government, much like its predecessors, is unwilling to engage in any conversations about IR35 repeal, writes Joshua Toovey, Senior Research and Policy Officer at IPSE – The Self-Employed Association.
IR35 in 2025: Devastating responsibility shift, deafening reaction…
The move to shift the responsibility for determining IR35 status from the contractor to the end client has had a devastating impact on contractors and clients alike.
And yet, the silence from Westminster is deafening.
The Keir Starmer-led government, now into its second year, continues to bat away any talk of reviewing the off-payroll working rules in parliamentary questions, almost always preferring to cite HMRC’s estimate that IR35 reform has yielded an additional £4.2 billion in tax revenues in the period October 2019 to March 2023.
But outside of government, the mood is shifting.
The opposition walls are closing in on off-payroll working rules
There’s a growing political consensus forming among opposition parties.
The Liberal Democrats promised to review IR35 in their last manifesto.
Reform UK has gone further, pledging to scrap it altogether.
MP Rupert Lowe’s new movement (Restore Britain), which has made support for small businesses and the self-employed a central plank, also wants the IR35 legislation abolished.
If the polls are to be believed, these aren’t fringe voices anymore. They’re tapping into a deep frustration felt by thousands of contractors who’ve seen their livelihoods undermined by an ill-thought-through policy.
IR35 is where the Tories could steal a march
The Conservatives, too, have a decision to make.
Once proudly known as “the party of business,” the Conservatives now face growing pressure to reconnect with the self-employed voter bloc – a group they’ve steadily alienated. A serious commitment to reviewing or reversing the IR35 reforms could help the Conservative Party reclaim their pro-business credentials and send a clear message – that it’s ready to back Britain’s flexible, freelance workforce once again.
IR35 reform has led to fewer contracts, lower earnings and growing instability
And it’s not just politicians. Business groups are starting to speak out too. The CBI has proposed a “green card” system to simplify off-payroll rules and reduce the compliance burden on clients.
Meanwhile, at IPSE, we continue to lead the charge for change, highlighting the ruinous consequences that IR35 reform has had on contractors, businesses, and the wider economy.
Our (IPSE’s) IR35 Spotlight 2025 report lays it out in black and white: fewer contracts, lower earnings, and a growing sense of instability across the sector.
Contractors are being forced into umbrella companies, pushed to accept less favourable terms, or leaving self-employment altogether. And businesses are losing access to flexible talent just when they need it most.
So why the inertia on IR35, as a policy?
The answer to this key off-payroll working question lies in IR35’s lingering political baggage. The policy was thrust back into the spotlight during Liz Truss’s brief premiership, when her government pledged to repeal the 2017 and 2021 IR35 reforms as part of the infamous mini budget.
While the announcement was widely welcomed by contractors, it was short-lived – reversed just three weeks later amid economic turmoil and Truss’s resignation.
Off-payroll rules repeal is tainted by mini-budget 2022’s chaos, but not tainted indefinitely
Since then, IR35 has remained politically toxic – complex, controversial, and tied to a moment of fiscal chaos that few in government want to revisit.
But that doesn’t mean the pressure isn’t building.
The next general election could, however, be a turning point. If opposition parties and campaigners continue to rally around the issue, IR35 could be forced back onto the political agenda.
For now, contractors are left navigating a system that’s widely acknowledged to be broken. The government may be content with the status quo – but the people affected by IR35 are not.
Getting support with IR35
Navigating IR35 legislation and ensuring compliance can be challenging for contractors and businesses alike. Kingsbridge offers tailored support, including expert guidance on IR35 status assessments, compliance strategies, and risk mitigation. Their team is dedicated to helping contractors and businesses understand and adapt to the evolving tax landscape.
They 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 their experts today.
Joshua Toovey, Senior Policy and Research Office at IPSE – The Self-Employed Association
Josh is Senior Policy and Research Officer at IPSE – The Self-Employed Association, the representative body for the UK’s self-employed community, including freelancers, contractors, consultants and independent professionals.
He is responsible for leading IPSE’s research into freelancing and self-employment. His research work has focused on issues such as the impact of IR35 reforms, late payment, financial wellbeing, the umbrella company market and underrepresented groups in self-employment. Josh was an expert witness for the House of Lords Finance Bill Sub-Committee. He studied international relations and politics at Bath University.
