IR35 reforms repealed

Chancellor Kwasi Kwarteng announced on Friday as part of the mini-budget, that the UK Government will be repealing the recent IR35 reforms for both public and private sector.

The Government's Growth Plan sets out to take complexity out of tax and states that:

“The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will be repealed from 6 April 2023”. From this date, it means contractors will once again be responsible for determining their employment status.

Since the 2021 IR35 reforms came into effect they have been hugely criticised for causing confusion and friction for recruitment agencies, contractors and hirers. There is an overwhelming consensus that IR35 took away some of the flexibility at a time where most companies and public sector services needed to be more agile and embrace the use of independent contractors with specialist skills. While the IR35 reforms are being thrown in bin, the need for businesses to ensure worker regulation and tax compliance (specifically, not paying contractors off-payroll if they are in fact performing employee-like duties) remains as strong as before.

Our CEO, Tim Bailey, said:

"The demand for contractors, whilst already huge, will certainly increase off the back of this announcement. Companies will need to continue to think carefully about how they work with contractors and recruitment providers to ensure that they remain compliant and as efficient as possible. But this news is an exciting boost for the recruitment industry as a whole."