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The IR35 reform U-turn: what does it mean for businesses?

Just a few short weeks ago, Kwasi Kwarteng declared that the IR35 off-payroll reform – across both the private and…

Author Photo by Kingsbridge

Just a few short weeks ago, Kwasi Kwarteng declared that the IR35 off-payroll reform – across both the private and public sectors – would be repealed. Yesterday, however, after much speculation following various U-turns, newly appointed Chancellor, Jeremy Hunt, announced that the planned IR35 OPR repeal will, in fact, no longer take place.

For both recruiters and contractors alike, this news is a major blow. Many businesses in the contractor supply chain welcomed the idea of the IR35 reform repeal, and it’s easy to see why.

Many contractors, who feel they have been unfairly treated under the most recent OPR IR35 rules, saw a glimmer of hope at the idea of the reform repeal, and were looking forward to businesses U-turning their blanket bans, bringing more contract opportunities to the market and leaving contractors to decide their own IR35 status.

End Clients who had previously avoided engaging contractors under the current rules – for fear of HMRC investigation – are now facing the continued liability for HMRC investigations and unpaid tax if incorrect IR35 assessments are made.

So, with the news of the IR35 reform repeal reversal, what can you do to arm your business and stay vigilant? Here’s what we at Kingsbridge recommend:

Don’t stop current IR35 processes

With the news of the U-turn on the IR35 reform repeal, it’s especially important for end clients & the rest of the supply chain to continue making status determinations whenever engaging with contractors.

If this is something you need help with, there are a multitude of companies out there who can support you, including Kingsbridge. If you haven’t yet seen our recent IR35 webinar, take a look for how you can stay IR35 compliant.

Remain compliant                

In the whirlwind of the IR35 repeal news, don’t forget to stay compliant across the board. Understandably, the off-payroll reform repeal has been at the top of everyone’s agenda in the last few weeks, but it’s vital right now – as always – to ensure you are doing everything by the book.

So, being able to demonstrate not only IR35 compliance but also a smooth onboarding process will stand you in good stead.

Access top contracting talent 

One thing that’s increasingly apparent is that businesses may find it harder to remain competitive if they continue to ignore the significant pool of talented contractors who want to work outside IR35. To thrive, it’s essential to understand that the current IR35 off-payroll reform rules are here to stay.

Embracing contractors, rather than ignoring this pool of talent, is far more beneficial in the long run. With the right processes in place, and by partnering with the right businesses, the tax risks associated with IR35 can be managed.


Remember, if you have any IR35 questions or need any further support, our IR35 experts at Kingsbridge are here to help. And for regular IR35 updates, sign up to our mailing list.

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