IR35 is Changing. Here's Everything We Know So Far...

3-4 Minutes

***On Monday 17th October 2022, Chancellor Jeremy Hunt reversed his predecessor's plan ...

By Alex Banks

Contract & Compliance Manager


On Monday 17th October 2022, Chancellor Jeremy Hunt reversed his predecessor's plan to repeal previous forms of the IR35 legislation. We will continue to communicate with our contractors and Life Sciences businesses as to what this means for them in the coming months.


The most talked-about piece of legislation in the contracting world is back on everyone’s agenda.

Kwasi Kwarteng’s mini-budget outlined on the 23rd September 2022 states that from April 2023, previous forms of the legislation are being repealed. In this post, we take a look at what this means for contractors working in the Life Sciences space.

IR35, also known as the Intermediaries Legislation, or off-payroll working rules, is a piece of anti-tax avoidance legislation designed to combat what is known as “disguised employment” i.e. when a contractor would essentially be working as an employee if all intermediaries, including their Limited Company, weren’t present.

The original IR35 legislation, which came into force in the millennium, has been heavily criticized over the last 20 years and has been reviewed and reformed several times since then, with the biggest taking place in 2017.

Each reform aims to better identify legitimate independent workers who fall outside of IR35. The classifications are as follows:

- INSIDE IR35: when a person is classified as an employee of the end client for tax purposes and, as such, is subject to PAYE deductions.

- OUTSIDE IR35: when a person is classified as a genuine independent contractor through their Limited Company, with the evidence available to support their status.

In April 2017, the government introduced legislation changes for the public sector. These changes were due to be rolled out to the private sector in April 2020, but typically, the Covid-19 pandemic caused delays, and they were only enforced from April 2021.

The 2017 and 2021 reforms moved the assessment of a contractor’s IR35 status away from the contractor and to the end client. This significantly impacted contractors, clients, umbrella companies, managed service programmes, and recruitment businesses, who all had to adapt their ways of working, create new internal processes, and provide clarity on compliance procedures.

Last week, on September 23rd, 2022, just 18 months after the private sector reform, the government announced that the IR35 legislation is changing again. The announcement declared that the reforms of 2017 and 2021 are to set to be repealed in April 2023.

So, as we await further clarification from the government, this is what we know so far:

- This is not an immediate change. The current ways of working (end client’s determining IR35 status) will remain in place until April 5th, 2023.

- IR35 status decisions are set to move back to being that of the contractor from April 6th, 2023.

- IR35 as legislation as a whole is not going away.

- Although the change has been proposed, it is not guaranteed. The reform will still require government approval, which, if successful, should happen early 2023.

Of course, with any change, and for those who have worked through the prior reforms, there are a number of pieces that will require clarification. Some of the immediate ones coming to mind are:

Will this be a like-for-like reversion of the IR35 ways of working pre-2017, or will there be a further process to follow?

This will require confirmation from HMRC; however, it would be advisable for contractors to think about their ways of working to be in an assured position to make their determinations when April comes around. Factors such as rights of substitution, an end client’s supervision direction, and control and mutuality of obligation are all likely to remain key factors in any IR35 determination.

I’m set to start a contract next week; what do I do?

The current IR35 legislation isn’t changing until April 5th, so the end client will still be required to provide the Status Determination Statement until then.

I’m currently working inside IR35 on a contract going beyond April 2023; what’s best for me?

This is likely one of the biggest questions to arise, and we will keep a close eye on the best route forward for those in this category. One thing that would be highly unlikely to pass as compliant would be leaving an Inside IR35 position one week, to start the exact same position as Outside IR35 the following.

HMRC will hopefully provide more information over the coming weeks/months as we all navigate this third IR35 change in six years. We advise all those who will be impacted to keep up to date with the latest developments and liaise with end clients and agencies when applicable.

For all Meet’s clients and contractors, we will observe everything surrounding the change, and like always, we’ll be here to offer support wherever required over the coming months.

If you have any questions or would like further information, please e-mail

Book in a call with one of the team about your hiring needs.

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