The Conservatives have strengthened their position on IR35, pledging to replace the current regime with a new system if the party returns to government.
In his first major speech as Shadow Chancellor on 17 September 2026, Andrew Griffith went significantly further than previous Conservative commitments to review or reform IR35.
Griffith said:
“I’m committing today that the next Conservative government will replace IR35, not reform it, not review it, but replace it with a new system that respects the right of the self-employed to choose their status and only prevents actual abuse.”
He also criticised the existing regime, saying IR35 had “crushed the dreams” of many self-employed people and that many had felt badly let down by previous IR35 policies.
The announcement represents a significant development in Conservative policy. Party leader Kemi Badenoch pledged in June to “reform IR35”, but did not explain what that reform would involve.
Griffith has now explicitly committed the party to replacing the regime rather than simply amending it.
What has the Conservative Party announced?
The Conservatives have not yet published detailed proposals for the system that would replace IR35.
Griffith’s comments suggest that a replacement would seek to give genuinely self-employed workers greater freedom to determine how they work, while retaining rules designed to prevent arrangements considered abusive.
However, important questions remain unanswered.
There is no indication yet of whether a future Conservative government would repeal the off-payroll working rules, change the underlying employment status tests, replace HMRC’s CEST employment status tool, or introduce an entirely new approach to taxing people who work through intermediaries.
Until detailed proposals are published, it is therefore unclear exactly what “replace IR35” would mean in practice.
Readers unfamiliar with the current framework can start with our guide to IR35 and our explanation of the off-payroll working rules.
From ‘look again’ to ‘reform’ to ‘replace’
The Conservatives’ position on IR35 has hardened considerably over the past year.
In August 2025, Griffith, then Shadow Business Secretary, said a future Conservative government would “look again” at IR35 reform if elected, as part of a wider effort to support the self-employed and reduce burdens on small businesses.
Then, in June 2026, Badenoch made a more explicit commitment during a speech to financial services leaders.
She said:
“We will scrap ESG reporting, reform IR35 and get rid of diversity and inclusion reporting for financial services.”
The speech did not explain what form that reform might take.
Griffith’s September announcement goes substantially further. Rather than promising another review or changes to the existing system, he has now said that a future Conservative government would replace IR35 altogether.
The Conservatives created the current off-payroll regime
The latest pledge is particularly notable because the off-payroll reforms currently affecting many contractors were introduced by Conservative governments.
IR35 itself dates back to 2000, but responsibility for determining employment status was shifted away from many contractors under reforms introduced much later.
The off-payroll rules were first extended across the public sector in 2017 before being rolled out to medium and large private sector organisations in 2021.
Both reforms transferred responsibility for making most IR35 status determinations away from contractors and onto the organisations engaging them.
The changes were intended to improve compliance with the legislation but attracted significant criticism from contractors, recruitment businesses and end clients.
See more in our history of IR35 and the off-payroll reforms.
The Liz Truss repeal attempt
The Conservatives have previously gone further than simply promising reform.
In September 2022, then Prime Minister Liz Truss and Chancellor Kwasi Kwarteng announced plans to repeal both the 2017 and 2021 off-payroll reforms as part of the government’s mini-budget.
The proposal would have returned responsibility for determining IR35 status to contractors operating through their own limited companies.
The announcement was welcomed by many contractors and freelance groups, but the policy was abandoned before implementation following the political fallout from the mini-budget.
As a result, the off-payroll rules remain fully in force today.
Where do the political parties stand on IR35?
The Conservatives’ latest announcement puts IR35 firmly back on the political agenda.
Restore Britain, the party launched by Rupert Lowe, has pledged to scrap IR35 entirely from day one of a future government, arguing that the rules unfairly tax contractors as employees without providing corresponding employment rights. We recently looked at Restore Britain’s proposal to abolish IR35.
Reform UK has also previously called for IR35 and the off-payroll working rules to be repealed, arguing that the legislation creates unnecessary bureaucracy and discourages entrepreneurship.
The Conservatives have now moved beyond their previous commitments to review or reform the rules. Griffith’s September 2026 pledge is to replace IR35 with a new system, although the party has not yet published the detail of what that replacement would look like.
Meanwhile, Labour has not announced plans to repeal the off-payroll reforms. The existing rules therefore remain in force.
The next important development will be the detail behind the Conservative proposal. Until that emerges, it is not yet possible to know whether “replacing IR35” would mean abolishing the existing off-payroll framework, rewriting the underlying employment status rules, or introducing a different system altogether.
Political debate around tax and employment policy tends to intensify as a general election approaches, so IR35 may become an increasingly prominent issue as the parties develop their plans for the next election.