Contracting Sector Reacts with Skepticism to Liz Truss's Pledge to Review IR35 Rules
Stakeholders in the UK contracting industry have voiced skepticism in response to Conservative leadership candidate Liz Truss's pledge to review the IR35 tax rules if she becomes prime minister. 
In a recent newspaper interview, Truss, who currently serves as foreign secretary and has previously held the role of chief secretary to the Treasury, stated that she would order a review because the IR35 regulations force genuinely self-employed people to pay too much tax.
The IR35 framework, which has seen major reforms in recent years in both public and private sectors, transfers responsibility for tax status decisions from contractors themselves to the organizations that hire them. HM Revenue & Customs (HMRC) directs these organizations to determine—using 'reasonable care'—whether a contractor falls inside or outside IR35. If inside, contractors are taxed as employees and required to pay PAYE and National Insurance, but do not receive employee benefits like paid sick leave or holidays. 
A major criticism is that this results in 'zero-rights employment', where contractors shoulder employee tax burdens without receiving equivalent rights. MPs, campaign groups, and now Truss herself have expressed concern over this growing issue. "The changes that have been made to IR35 are all about trying to treat the self-employed the same as big business," Truss commented. "But if you’re self-employed, you don’t get the benefits of big company employment, and the tax system should reflect that more."
Her pledge has prompted cautious optimism from the contracting community, though many recall similar past reviews that have led to minimal changes. Andy Chamberlain, policy director at The Association of Independent Professionals and the Self-Employed (IPSE), welcomed the acknowledgment but insisted: "We have had reviews before and none of them have led to anything meaningful. This review must lead to radical and tangible change. Nothing should be off the table, including scrapping this dreadful legislation altogether."
Dave Chaplin, CEO of IR35 Shield, mirrored these sentiments: "We don’t need another review, we need action. The so-called reforms are a flawed botch and have simply served to strangle contractors and the businesses which hire them." He added that shifting responsibility for determining tax status has resulted in widespread blanket determinations and, in some cases, organizations banning contractors altogether to avoid administrative burdens.
Seb Maley, CEO of Qdos, called the news of a potential review “promising” if carried out thoroughly, but warned: "It’s widely accepted that the IR35 legislation and the way HMRC enforces it is fundamentally flawed. Liz Truss must make a review a priority if she becomes prime minister. But this mustn’t be lip service or a tactic to win votes."
Many in the contracting market believe any meaningful change will require an independent and comprehensive assessment of the IR35 rules. As it stands, skepticism remains high due to the history of unfulfilled promises and lack of substantial reform.
In a recent newspaper interview, Truss, who currently serves as foreign secretary and has previously held the role of chief secretary to the Treasury, stated that she would order a review because the IR35 regulations force genuinely self-employed people to pay too much tax.
The IR35 framework, which has seen major reforms in recent years in both public and private sectors, transfers responsibility for tax status decisions from contractors themselves to the organizations that hire them. HM Revenue & Customs (HMRC) directs these organizations to determine—using 'reasonable care'—whether a contractor falls inside or outside IR35. If inside, contractors are taxed as employees and required to pay PAYE and National Insurance, but do not receive employee benefits like paid sick leave or holidays.
A major criticism is that this results in 'zero-rights employment', where contractors shoulder employee tax burdens without receiving equivalent rights. MPs, campaign groups, and now Truss herself have expressed concern over this growing issue. "The changes that have been made to IR35 are all about trying to treat the self-employed the same as big business," Truss commented. "But if you’re self-employed, you don’t get the benefits of big company employment, and the tax system should reflect that more."
Her pledge has prompted cautious optimism from the contracting community, though many recall similar past reviews that have led to minimal changes. Andy Chamberlain, policy director at The Association of Independent Professionals and the Self-Employed (IPSE), welcomed the acknowledgment but insisted: "We have had reviews before and none of them have led to anything meaningful. This review must lead to radical and tangible change. Nothing should be off the table, including scrapping this dreadful legislation altogether."
Dave Chaplin, CEO of IR35 Shield, mirrored these sentiments: "We don’t need another review, we need action. The so-called reforms are a flawed botch and have simply served to strangle contractors and the businesses which hire them." He added that shifting responsibility for determining tax status has resulted in widespread blanket determinations and, in some cases, organizations banning contractors altogether to avoid administrative burdens.
Seb Maley, CEO of Qdos, called the news of a potential review “promising” if carried out thoroughly, but warned: "It’s widely accepted that the IR35 legislation and the way HMRC enforces it is fundamentally flawed. Liz Truss must make a review a priority if she becomes prime minister. But this mustn’t be lip service or a tactic to win votes."
Many in the contracting market believe any meaningful change will require an independent and comprehensive assessment of the IR35 rules. As it stands, skepticism remains high due to the history of unfulfilled promises and lack of substantial reform.
