The results of a recent government questionnaire asking businesses which rules and regulations were holding them back found that IR35 was the most frequently cited measure that requires reform
The finding appears in the Department for Business and Trade’s summary of responses to its Unlocking Business: Reform Driven by You questionnaire, published on 8 July 2026.
The Department asked businesses, trade associations and other organisations to identify regulations they thought were outdated, inconsistent or unnecessarily restrictive.
Although respondents raised concerns across a wide range of areas, from planning and environmental permits to packaging and chemicals regulation, IR35 was mentioned more than any other issue.
According to the report:
“The IR35 regime was the most frequently cited topic requiring reform, however this is a tax issue rather than one of regulation.”
The questionnaire formed part of a wider government programme examining regulatory burdens, while IR35 and the off-payroll working rules fall under tax legislation and are overseen by HM Treasury and HMRC.
Businesses continue to raise concerns about the off-payroll rules
The questionnaire received 271 responses from businesses, representative organisations, trade bodies and individuals.
The report does not publish the individual submissions or provide a detailed breakdown of the requested IR35 changes. However, it separately acknowledges the burden associated with the current regime:
“Concerns about IR35 off-payroll working rules were also raised. While primarily a tax issue, the Government recognises the administrative burden.”
Under the off-payroll rules, public sector organisations and medium and large private sector clients are usually responsible for deciding whether a contractor working through an intermediary would be an employee if engaged directly.
The client must take reasonable care when making the decision and provide the contractor with a Status Determination Statement setting out its conclusion.
Where the client qualifies for the small company exemption, responsibility normally remains with the contractor’s limited company under the original Chapter 8 rules.
For organisations affected by Chapter 10, compliance can involve assessing individual engagements, gathering evidence about working practices, issuing determinations, handling disagreements and reviewing decisions when the role changes.
No plans to reverse the reforms
Despite the prominence of IR35 in the questionnaire feedback, the Government has made clear that it has no plans to repeal the off-payroll changes introduced in the public sector in 2017 and the private sector in 2021.
The report says:
“There are no plans to repeal these reforms, though HMRC continues efforts to improve administration.”
The Government has also repeated its claim that the reforms have generated significant additional tax revenue, stating that they:
“are estimated to have raised an additional £4.2 billion in revenue.”
Unsurprisingly, critics of the legislation have questioned the Government’s estimate that the reforms have raised an additional £4.2 billion in tax revenue.
They argue that it is difficult to isolate the impact of the off-payroll rules from wider changes in the labour market and contractor behaviour, while the estimate does not attempt to measure the broader economic consequences of the reforms, such as contractors leaving the market, businesses imposing blanket inside-IR35 decisions, reduced labour market flexibility or projects that became more difficult to staff with specialist contractors.