Could the UK Finally Abolish IR35? Why Single Worker Status Could Change Everything

Why IR35 Could Be Scrapped – And What Happens Next?

Could IR35 be scrapped? A bold question, but one that’s starting to feel less far-fetched. The UK government is considering a Single Worker Status (SWS) – a reform that could overhaul employment law, simplify worker classifications, and potentially make IR35 redundant.

For freelancers, contractors, recruiters and businesses, this could be one of the most significant shifts in employment legislation in decades.

What Is Single Worker Status and Why Does It Matter for IR35?

The government is exploring a move away from the current three-tier framework of employee / worker / self-employed. Instead, a new Single Worker Status would merge the “worker” and “employee” categories into one, granting stronger protections such as:

• Holiday pay

• Statutory sick pay

• Minimum wage rights

• Potential unfair dismissal rights

If implemented clearly, this reform could eliminate much of the ambiguity that drives IR35 disputes today. Many of the complex tests around control, substitution, and mutuality of obligation might no longer apply in the same way.

For the genuinely self-employed, the change could bring greater legal clarity, reducing the risk of misclassification and giving both clients and contractors more confidence in HMRC compliance.

The Political and Legal Complications

While the headlines suggest IR35 could be on borrowed time, the reality is more complex:

• Consultation first – The government has promised a consultation on employment status reform by the end of 2025.

• Not immediate legislation – The Single Worker Status is not part of the current Employment Rights Bill, but instead seen as a longer-term reform goal.

• Definitional challenges – Where do you draw the line between “genuinely self-employed” and “worker”? Issues like substitution clauses, level of control, and tax alignment remain contentious.

• Parliamentary hurdles – Any reform would face debates, amendments, committee scrutiny, and potential pushback from both worker groups and business lobbies.

Potential Timeline for IR35 Reform

In other words, while IR35’s abolition is possible, it’s unlikely to happen overnight.

What Freelancers, Contractors & Recruiters Should Do Now

While the legislative gears turn slowly, the smartest move is to prepare early.

The first thing to do is to stay alert and keep an eye out for the consultation in 2025.

When it opens, be ready to review the details and contribute your perspective.

It is also worth carrying out an audit on your contracts. Take time now to review existing terms and check that they remain compliant under the current IR35 rules.

Clarify engagements with clients, making sure roles are well defined – particularly when it comes to substitution, control, and financial risk.

Finally, seek professional advice.

Speaking with experts in tax, payroll, and employment law will give you confidence and help protect your business.

Could IR35 Really Be Abolished?

Yes – the introduction of a Single Worker Status could eventually render IR35 redundant. But reform is years away, subject to political negotiation, and far from guaranteed.

One thing is certain: the recruitment and contracting world cannot afford to ignore it.

At NRP, we cut through the noise and track every development in employment law, recruitment legislation, payroll and compliance – so you don’t have to.

We’ll be keeping an eye on this development of course, and we’ll be ready for the day IR35 might finally be torn up.