Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make it her policy to enable contractors to determine their own IR35 status.

The off-payroll working rules, also known as IR35, were introduced in 2000. They are designed to ensure that individuals working like employees, but through their own company, pay broadly the same income tax and National Insurance contributions as those who are directly employed.

Under the original off-payroll rules contractors were required to assess their own status. HMRC estimated only 10% of those who should be applying the rules in the private and voluntary sectors did so correctly, resulting in widespread non-compliance.

The rules were reformed for the public sector in 2017 and for the private sector in 2021. The responsibility for operating the rules was shifted from the worker to the entity that engages the worker. As a result of the reform, HMRC estimate an additional £4.2 billion has been received in tax revenues, overall, in the period October 2019 to March 2023.

On 27 February 2025, HMRC published updated analysis on the impacts of the 2021 off-payroll working rules reform in the private and voluntary sectors. It can be found here: Update to the impacts of the 2021 off-payroll working rules reform in the private and voluntary sectors - GOV.UK