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The IR35 Reforms Repeal: Our Contract Consultants React

Following the recent proposed repeal of the IR35 Legislation Reforms in April 2023, announced in the Government’s ‘mini-budget’, we reached out to our Contractor Consultants here at Heat to get their view on likely impacts if the withdrawal of this legislation goes ahead.

Currently, the repeal is merely a statement of intent rather than an agreement. Until the next Finance Act, IR35 will remain in it’s current form. Moreover, if the repeal is agreed, it is important to bear in mind that IR35 is not going anywhere; it will remain in place, but in a simpler format, whereby workers will once again be the ones responsible for determining their own employment status and paying the appropriate amount of tax and NI contributions.
We asked our contractor consultants to share their insights on what the likely impacts would be on the hiring market, for both contractors and end-clients, should the repeal go ahead.

“IR35 reforms are important steps in taking complexity out of the tax system. From April 2023, workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and NI. As a market we expect to see new confidence in engaging with the contractor market again with the risk and nervousness of complex regulations dropping off. Britain more than ever needs a flexible workforce and contracting can provide rapid growth at a time where it is needed most.”

Dan Chadwick – Director of Digital & Tech


“It’s good news that the call to reverse the IR35 rules as of Apr 2023 have been implemented, although the question must be why so soon after the original implementation in 2017 public sector and 2021 private sector. The compliance and additional work involved in adopting IR35 has been a huge effort to the UK workforce, hindered many an opportunity or meant that Contractors simply did not take on the assignment being offered.  I am pleased to hear that this piece of legislation is potentially being revoked, but it was always going to be ‘fool’s gold’ and the government should have listened harder to those on the coalface: the Contractors, Recruitment Agencies and Businesses, and the industry bodies such as APSCo.  At Heat, we will move forward and continue to focus on supplying the best Contractor Service that we can.”

Steve Preston – CEO


“While it may be controversial that, should the repeal go ahead, the Government will be giving up all the tax they would be making from IR35 at a time when the country urgently needs money, this move has the potential to really jump start the market. As somebody that has worked in Public Sector recruitment for close to seven years, the last three years in particular have been really tough; what with trying to meet our public sector clients requirements, as they have been offering the same rate of pay for contracts regardless of the role being inside or outside IR35.”

Chris Reid – Managing Consultant of Public Sector


“In my opinion, for everyone concerned with IR35 this news is massive. It has to take away the dreaded process of determination, ‘is this piece of work outside or inside’, and the documentation that comes with checking this. It was messy from the beginning, and meant that many companies decided to pause projects, growth and hiring because they were confused as to what it meant for them. Contractors chose outside IR35 projects because it was less ‘hassle’ for them, even though they had been paying their own tax the whole time, this confused it for them.

The introduction of IR35 was simply to tackle tax avoidance from businesses that are designating their workers as disguised employees and contractors that are designating themselves as disguised employees. I think the reasons for repealing the way IR35 is used right now is because the Government have seen the numbers and 90% of people are paying their tax accordingly. What IR35 has done more than anything, is make it harder for companies to hire and look at growth which in turn helps the economy.

Also, even after the repeal of IR35, it will still exist, it will not be cast aside and forgotten about. So, for now, its great news regarding the complexity of it could be removed, but we’ll see what it means as we come closer to a new way of dealing with Off-Payroll.”

– Jack Turner, Digital & Tech Contract Consultant