The changes come into force from 6 April and will mean workers that provide services via an intermediary will be responsible for determining their employment status and paying the appropriate amount of tax and national insurance contributions.

IR35 applies to a worker or contractor who provides their services through their own limited company or another type of intermediary to the client, but who would be an employee if the intermediary was not used.

It makes sure a worker, who would have been an employee if they were providing their services directly to the clients, pays broadly the same tax and national insurance contributions as an employee.

In 2017, reforms said that public authorities were responsible for deciding if the rules applied where they contracted worked who provide services through their own intermediary.

Reforms in 2021 mandated that all public authorities and medium and large-sized clients were responsible for deciding if the rules applied to them.

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‘Unnecessary complications and costs’

In his mini Budget today, Chancellor Kwasi Kwarteng said that reforms to IR35 rules had “added unnecessary complications and costs for many businesses” so they would be removed.

According to research from the Association of Independent Professionals and the Self-Employed last year, around 35 per cent of contractors had left self-employment since changes to IR35, either moving to permanent employment, retiring, working overseas or simply not working.

Research from the National Audit Office also showed that 2017 reforms meant HMRC faced “new risks” and cases of non-compliance were likely to fall on employers.