Threshold Changes To UK Off-Payroll Working Rules (IR35): End User And Contractor Considerations

The UK’s IR35 regime, also known as the off-payroll working rules, continues to play an important role in how businesses engage contractors operating through personal service companies. Since the IR35 reforms for the private sector in April 2021, medium and large entities have borne responsibility for determining a contractor’s tax status and, where relevant, operating Pay As You Earn (PAYE) and National Insurance contributions (NICs).

Starting on 6 April 2026, the financial thresholds used to determine whether an end user (that is, the organisation receiving the contractor’s services) is classified as small, and therefore exempt from the 2021 IR35 reforms, will increase. Accordingly, some companies currently within scope of IR35 will fall outside the regime at the start of the 2026-2027 tax year.