IR35 reforms to be repealed in April 2023

By Steve Smith

Along with a range of measures announced in Kwasi Kwarteng’s ‘Mini-budget’ last week, the 2017 and 2021 changes to IR35 legislation are set to be repealed in April 2023. This is welcome news for the contractors and the industry, but what changes can we expect to see after it is repealed?


The most drastic change is that contractors will now be able to make their own contract determinations and decide whether the nature of the work is that of a contractor or a permanent employee. The 2017 changes to IR35 shifted this determination onto employers and pushed most organisations into making blanket decisions on all their contractors. These blanket decisions pushed most into permanent employment or ‘inside IR35’ contracts.


The reforms to the legislation, which were originally designed to combat ‘disguised tax avoidance’, had a detrimental impact on the contracting industry. Some studies indicated that over a third of contractors chose to leave self-employment altogether as a result of the reforms.


Of the remaining two thirds, many were pushed into working through umbrella companies or working on projects which were deemed ‘inside IR35’ by their employers. While these arrangements allowed contractors to keep their self-employed status, they stifled the flexible nature that comes with a contracting career and discouraged experts who were looking to pursue careers in freelancing.


Procorre’s report on IR35 back in 2020, indicated that the reforms would also be advantageous for contractors overseas and reduce contract opportunities for UK contractors.


So, what can we expect to happen in April 2023?

We anticipate seeing a huge resurgence in contracting after the reforms are repealed.


Many organisations who previously pushed their contractors into ‘inside IR35’ or employed contracts will feel the pressure to revise their relationships with staff to retain the best talent. For smaller businesses, we expect that many will take the opportunity to recruit contractors for short-term projects.


What if I closed my Limited Company?

If you closed your limited company, then Procorre Partners can help.


We can help you to re-establish your limited company and start regrowing your network to get back into contracting, just like you did before.


If you are looking to get back into contracting, contact Procorre Partners today.