Back to News

by

IR35 Investigations: Why You Haven’t Seen Many – But They Are Happening

When the off-payroll (IR35) rules were extended to the public sector in 2017 and later to the private sector in 2021, businesses braced themselves for HMRC investigations. For many, the lack of immediate headlines about fines may have felt like nothing was happening. The truth? IR35 investigations take years to build — but when they do, the results are significant.

We’ve mapped the key investigations and liabilities into a visual timeline (see infographic), showing just how slow but impactful HMRC’s enforcement can be.

The Public Sector Story

  • Since April 2017, HMRC has conducted extensive IR35 reviews across government departments.
  • The Department for Work & Pensions (£87.9m), Ministry of Justice (£72.1m + £15m fine), and the Home Office (£29.5m + £4m fine) are among the highest-profile cases.
  • “Careless” assessments and reliance on CEST have repeatedly been flagged as costly mistakes.
  • Even healthcare and infrastructure bodies like NHS Digital (~£4.3m) and HS2 (£6.2m) weren’t immune.

Private Sector Enforcement Begins

  • It took until September 2021 for HMRC to launch its first private-sector reviews — one organisation underwent an 18-month compliance check covering 300 contractors.
  • By late 2024, HMRC targeted at least five IT sector clients with new compliance checks.
  • In February 2025, HMRC revealed the private-sector reforms raised £4.2bn in extra tax/NIC from 120,000 workers.

What This Means for Businesses

  • Investigations don’t happen overnight. They span months (often years) before reaching settlement.
  • A lack of immediate action doesn’t mean HMRC isn’t reviewing — it just means outcomes aren’t public yet.
  • The lesson: don’t wait for headlines. Be proactive in your compliance approach.

For more information take a look at our latest infographic!

IR35 investigations are slow, but they are happening. Don’t let your business be caught unprepared.

Speak to Brookson Legal today for expert advice on IR35 compliance.

References: