IR35 repeal unlikely under Healey: Why outcome-based SOWs are now the safest bet for freelancers

Rich Wilson, CEO and co-founder of the tech recruitment platform Gigged.AI, is not changing his tune just because another chancellor has entered Downing Street.

His message to policymakers remains completely unchanged. Yet, he hopes the latest Chancellor of the Exchequer will finally listen: “John Healey MP, please repeal IR35 reform.”

Blanket bans are “stifling the freelance economy”

Wilson recently addressed the contractor community in a LinkedIn post. He pointed out an ongoing issue facing independent workers. Many large firms still maintain blanket bans on outside-IR35 engagements.

This practice continues regardless of political party or economic health. Wilson stresses that blanket bans are actively stifling the freelance economy.

He believes simply repealing IR35 would not be perfect. However, it would give the sector a massive boost.

Yet Wilson shares a common fear with many independent workers. He believes the chances of genuine policy change under Healey remain “slim”.

Healey’s track record on IR35 offers little hope

Positive policy changes for contractors can happen. The Freelance Informer has previously reported on several positive shifts. These include the UK’s equal pay framework, whereby employers could be legally required to publish pay ranges on job postings and prohibited from asking job applicants about their salary history.

However, past decisions often predict future actions. You need only look at Healey’s historic stance to gauge whether optimism is warranted.

“The new chancellor, John Healey, was the person who brought in the Managed Service Company legislation,” writes IR35 Shield CEO Dave Chaplin in a LinkedIn post.

As Financial Secretary to the Treasury, Healey presented and defended the MSC provisions in the Finance Bill 2007 (which became Section 25 & Schedule 3 of the Finance Act 2007).

Healey said,

Freelancers” is a colloquial, not a legislative term. The test will be whether individual workers run their own company to gain the advantage of taking the profits out of it as dividends. If workers are not running their own business, they are likely to be employees, and are therefore likely to be disguising their employment status and not paying the tax that they ought to be paying, as other employees do.

It is clearly unfair if two workers carrying out the same work pay different levels of tax and national insurance because one is operating through a structure provided by a third party that fails to apply the rules correctly.

There is also the further concern that some workers are encouraged, or even forced, to use MSCs without understanding that they may lose their employment rights. The Government therefore set out objectives and detailed proposals for change in the pre-Budget report in December.

Chaplin noted in his post that Healey not only pushed through the heavily criticised MSC legislation. Healey also actively championed and defended IR35.

Chaplin wrote: “We won’t be seeing any changes to IR35 in the near future.” He warned that contractors are likely in for the IR35 headache for the long haul.

The shift towards deliverables-based contracts

“The most certain way of working outside IR35 is a deliverables-based contract,” Chaplin continued.

He emphasised that the world of work is moving in that direction. Businesses are favouring less time and skills for pay towards outputs for quoted fees.

Wilson strongly agrees with this assessment: “The best way to work outside IR35 is an outcome-based SOW with payments based on deliverables.

Industry commentary backs the outcome-based approach

Published analysis of the outside-IR35 landscape echoes their view.

• In a briefing, recruitment group Morson Edge argued that buying outcomes cuts IR35 exposure. A genuine Statement of Work acts as a practical risk mitigator.

This holds true when backed by defined deliverables, acceptance criteria and supplier accountability. It must never be simple time-and-materials work under a different label.

A defensible model is built around clear outputs. Fixed-price or milestone fees push the relationship toward delivery accountability.

• Similarly, the May 2026 IR35 Update Guide issued a timely warning. A properly structured SOW can support a genuine business-to-business relationship.

However, the contract document alone offers very little protection. A Statement of Work is not an automatic IR35 exemption.

HMRC and tax tribunals will always look past paperwork to the commercial reality. They evaluate the contractor’s actual autonomy, financial risk, and project ownership.

This commentary reinforces the message from Wilson and Chaplin. A deliverables-based SOW remains the most credible route outside IR35.

Crucially, however, outcomes-focused paperwork must match daily working practices.

Related articles:

Outcome-Based Contracting: Learn more about how independent consultants use SOWs and results to stay off-payroll.

2026: How to get clients to drop Outside IR35 blanket bans

Policy & Gigged.AI Stance: Read Rich Wilson’s full interview on why the government needs to ditch IR35 reform to boost UK innovation.

Contractor trends: Explore market data on how working outside IR35 impacts contractor earning potential.

Zero-hours & SOW models: Read our breakdown on how milestone-based agreements protect self-employed status.