IR35: minister rules out review, stalls Single Worker Status

By mid-2026, HMRC’s IR35 position is clear: off-payroll working remains an active compliance priority. The focus is on accurate IR35 status decisions, “reasonable care” and supply-chain control. Scrutiny by HMRC is broader, more data-led, and less tolerant of weak evidence.

It’s not just contractors and advisers feeling this — writes Danny Batey, a former assistant HMRC inspector and now Markel Tax senior consultant — the Off-Payroll Working (OPW) rules continue to occupy the minds of MPs, who are reminded by their constituents of the difficulties and unfairness that the OPW rules have caused, and continue to cause.

On June 30th 2026 in the House of Commons, Conservative MP Andrew Snowden asked four direct questions about IR35, OPW and employment status.

He asked two questions of HM Treasury and two questions of the Department for Business and Trade.

What four questions on IR35 and self-employment did Andrew Snowden MP just ask?

1. To ask the Chancellor, what recent consultation HM Revenue and Customs has undertaken with freelance contractors, independent professionals and owner-managed businesses on the operation of the off-payroll working rules.
2. To ask the Chancellor, whether she plans to conduct a post-implementation review of the private sector off-payroll working reforms introduced in April 2021.
3. To ask the Secretary of State for Business and Trade, what progress he has made on implementing recommendations from the Taylor Review of Modern Working Practices on (a) self-employment and (b) independent work.
4. To ask the Secretary of State for Business and Trade, what assessment his department has made of the potential impact of the off-payroll working rules on the ability of small and micro-businesses operated by independent professionals to invest in growth and innovation.

What do new government statements on IR35 reveal?

The government provided one response to questions 1, 2 and 4, from Treasury minister Dan Tomlinson MP. His written parliamentary answer has three key takeaways for contractors:

1. There are no current plans to undertake further review of the IR35 reforms
2. The government is committed to consulting on employment status in due course
3. There are no current plans to add additional categories of employment status in the tax system.

What does Dan Tomlinson’s reply mean for Single Worker Status?

Readers of ContractorUK might be surprised that there are currently no government plans to add additional categories of employment status in the tax system. After all, the Labour government promised Single Worker Status in “Make Work Pay” — two months before it won July 2024’s general election.

It’s disappointing, too, that the status review is still on the shelf, as ministers originally promised to launch a review of employment status before 2026.

Is the news of no IR35 review plans surprising?

It’s much less surprising that there are no official plans to undertake further review of IR35 reform.

Even before Mr Snowden’s question, there was no doubt in our mind (as a specialist tax consultancy and insurer against IR35) that the IR35 OPW rules are a low priority for the government, in terms of review or change.

Let’s not forget that the contractor sector has been down this road many times before, and almost countless reviews have come and gone.

Now, with a new prime minister due to replace Sir Keir Starmer and a likely change of chancellor on the horizon, the government has what it will perceive as more important priorities to deal with.

[Editor’s Note: On July 3rd 2026, the business secretary Kate Dearden responded on behalf of the government to Mr Snowden’s third question: “While the Taylor Review of Modern Working Practices continues to be a valuable resource, the government is focused on delivering the plan to Make Work Pay to bring employment rights legislation into the 21st century.

“This includes measures to support the self-employed with new legislation on late payments that will ensure small businesses and the self-employed are paid on time. The government is also exploring additional measures to strengthen protections for the self-employed including the right to a written contract.

“The government is also committed to consulting on employment status in due course, which was raised in the Review.”]

What is HMRC’s IR35 message as H2 2026 begins?

The IR35 message from HMRC is that compliance with the off-payroll working rules is still an ongoing requirement.

In 2026/27, HMRC continues to apply the IR35 rules (of 2000) where a worker provides services through an intermediary, and would be considered an ‘employee’ for tax purposes, where both the contractual terms and conditions and working practices support a contract of service.

Is IR35 compliance a one-and-done task?

Assessing IR35 is not a ‘one-time’ limited exercise that can be filed away in the drawer and forgotten about after initial consideration!

Instead, compliance with IR35 remains a continuous requirement.

And where the end-client is not a ‘small company,’ then the OPW rules are similarly not a one-and-done, tick-box exercise. End clients must address these revised IR35 rules, introduced on April 6th 2017 (in the public sector) and April 6th 2021 (in the private sector), wherever they engage, either directly or indirectly, workers contracting through an intermediary.

What is HMRC interested in during an OPW compliance check?

HMRC is interested in how IR35 decisions were made — in practice.  In an off-payroll working check, HMRC also likes to scrutinise what processes the end-client adopted to create accurate Status Determination Statements (SDSs).

What information has been gathered for these SDSs, and whether contracts and working practices have been considered, also interests HMRC enforcement officers. 

What does PGMOL tell us about HMRC and IR35?

The latest employment status case to make headlines, “Professional Game Match Official Ltd vs HMRC,” shows that HMRC is prepared to test status arguments aggressively.

Although the ‘PGMOL’ case was not an IR35 case (and the First-tier Tribunal decision in PGMOL’s favour does not set legal precedent), the guidance issued by the Supreme Court on how future employment status cases — which includes IR35 — should be decided will directly impact how IR35 is interpreted.

Now that HMRC has told ContractorUK that it won’t appeal the FTT’s ruling in favour of PMGOL, we foresee this impact to be greatest around Control and Mutuality of Obligations.

Contractors and end-clients should pay particular attention to how these two key IR35 status factors impact the overall evaluation of a contractual engagement.

What’s the PGMOL case’s key lesson for UK organisations?

End-clients might need to be more alive to the PGMOL case’s key takeaways than even contractors. It has been estimated that the cost for the football referees body of defending its position against HMRC far outweighed the tax at stake.

This is an important reminder that tax disputes of this nature are very rarely settled quickly and often lead to many years of uncertainty — plus anguish, and at significant cost, on top of the actual tax liabilities.

What is HMRC’s off-payroll working questionnaire called?

Since 2023, we have assisted several clients across a range of different sectors, who have received a questionnaire from HMRC entitled “Status and Off-Payroll Working Questionnaire”.

The HMRC questionnaire contains questions that require detailed information and evidence to be provided by the employer, relating to the:

• type of engagement models used, and

• the types of temporary workers engaged (‘limited company contractors,’ ‘umbrella workers,’ ‘sole traders’ or ‘PAYE agency workers’)

Am I under HMRC investigation if I’ve received a Status & Off-Payroll Working Questionnaire?

While receipt of the questionnaire does not represent the opening of an HMRC investigation under the OPW legislation, it clearly demonstrates that HMRC has been actively collating information.

Potentially seminal to its OPW enforcement efforts, the provided information will allow the tax department to filter through and select those cases that demonstrate a higher risk — and therefore those worthy of enquiry.

Are OPW cases heading to the tribunal?

To date, we have yet to see any IR35 OPW cases relating to private sector end-clients reach the tribunal stage.

To many observers, cases under the ‘new IR35’ not making it to court indicates that HMRC has been sitting on its hands.

However, this is not the case. We are aware of OPW cases that are currently ongoing, with the expectation that more private sector enquiries under the Off-Payroll Working legislation will surely follow.

Does IR35 still apply in the public sector?

While private sector IR35 OPW cases have not yet hit the headlines, this is certainly not the case for the public sector, where we have seen IR35 being actively applied by HMRC.

Since the public sector OPW rules took effect on April 6th 2017, we have seen HMRC successfully challenge the determinations of a number of government departments.

How much has IR35 mismanagement cost public sector hirers?

These government departments have been deemed by HMRC to have inaccurately assessed the IR35 status of their limited company contractors.

The result for the public sector? A combined tax and NIC liabilities totalling approximately £400million.

The latest taxpayer-funded body to fall foul of HMRC’s compliance sledgehammer is the Post Office, where a jaw-dropping tax liability of £104M was assessed as being owed by Post Office Ltd (POL).

Has IR35 in the public sector gone away?

Disappointingly, the opportunity to use the IR35 tax offset mechanism, introduced on April 6th 2024 to reduce the liability by taking into account taxes already paid (in this case by the Post Office’s contractors), was declined.

At the very least, the Post Office IR35 tax debacle shows that the problem of IR35 and off-payroll working has far from gone away.

Why has HM Treasury written to government bodies?

In the wake of the public sector’s £400m IR35 failures, it’s perhaps no surprise that HM Treasury issued a letter in June 2026 addressed to “Accounting Officers of Central Government Bodies.”

The Treasury’s “Dear Accounting Officer” concerning “Tax Arrangements” letter sets out requirements and expectations for public sector bodies to carefully consider their tax arrangements. Public sector organisations’ contractual partners are also covered in the letter, with the aim of all parties avoiding any tax non-compliance.

Is IR35 a public sector employer’s only tax risk?

However, the issue is not only IR35, nor just employment status. Rather, public-sector bodies must have a clear overall understanding of their supply chains, assign clear accountability, and demonstrate compliant engagements across departments and third-party suppliers.

HMT’s letter smacks of concern from the government that some public sector bodies are not undertaking the expected ‘due diligence,’ and are potentially exposed to the tax authority.

What’s the tax gap in the UK?

HMRC is under pressure to close the ‘tax gap,’ improve yield and use data more effectively. New tax gap figures (published on June 23rd 2026) relating to the 2024/25 tax year will only add to that pressure. The figures contain a £59.2 billion gap between what’s expected to come into HMRC and what it actually collected.

With small businesses responsible for a majority share of the tax gap (62%), taxpayers will likely feel the pressure, too.

Is IR35 still a thing for HMRC?

As H2 2026 dawns, IR35 and OPW enforcement remains an important part of the broader HMRC compliance strategy.

Moreover, HMRC’s interest in employment status, umbrella companies, CIS, Managed Service Companies and labour supply chains is becoming increasingly joined up.

IR35: Are the Off-Payroll Working rules manageable for UK organisations?

However, IR35 does not have to be something that end-clients should panic about and avoid at all costs — insofar as the rules can be effectively managed by adopting robust processes that demonstrate “reasonable care” has been taken.

In fact, end-clients are now beginning to switch onto this reality.

Over the last six months, and likely due to the April 6th 2026 introduction of HMRC’s Joint & Several Liability umbrella company legislation, recruitment agencies and end-clients have been requesting our guidance on implementing or reviewing existing IR35 processes, with the intention of obtaining tax investigation and tax losses insurance cover.

Final thought

Employers and recruiters revisiting IR35 processes — and adding tax investigation cover for peace of mind — is cautiously good news.

It'll be especially welcome for contractors who ran a genuine limited company business but, since April 2017 or 2021, were pushed into umbrella employment by an end-user's risk aversion, taking a real hit to their income despite running a bona fide commercial operation. Whether that was HMRC's overstretched enforcement officers' hopes all along, we'll probably never officially know.