Recommendation 19

It is not yet clear to what extent the IR35 changes may have contributed to these issues by affecting hiring practices and decisions made by contractors in key parts of the workforce.38 HMRC believes that the reforms are unlikely to have had a material impact on the flexibility of the labour market but acknowledges that it does not yet have evidence on this, and its research has not examined whether there are particular issues in particular sectors.39 Stakeholders have reported that HMRC could do more to work with different sectors to understand the challenges they face, help develop more specific guidance and ensure that its CEST tool works equally well regardless of sector and role.40 HMRC told us of the ways it engages with stakeholders to monitor developments, particularly through its IR35 Forum. But there remain questions for how well HMRC can keep up with rapidly emerging and changing sectors, particularly in areas that have seen changes to more flexible and ad-hoc working practices in recent years.41 Assessing total costs and benefits of the reforms