IR35 Compliance in 2025

The off-payroll working rules — commonly referred to as IR35 — have reshaped how companies engage with IT contractors. In 2025, the pressure remains firmly on hiring managers and HR departments to ensure compliance and mitigate risk.

Why It Matters
Getting IR35 wrong doesn’t just result in HMRC penalties — it can also damage your employer brand and deter high-quality contractors from working with you. Many skilled professionals now actively avoid clients who issue blanket inside IR35 determinations or lack clarity in their process.

Best Practices for 2025

• Provide individualised IR35 assessments with documentation to back up your decision

• Work with compliant partners who understand the legislation and the contractor market

• Ensure consistency between contractual terms and actual working practices

• Communicate clearly with contractors to avoid mistrust or unnecessary attrition

At Prospectus, we support our clients in navigating the complexities of IR35 — from assessment templates to sourcing top-tier contractors who are IR35-savvy and project-ready.