A blanket ban is when an end client determines all contractor roles as inside IR35, regardless of the individual circumstances of each engagement. This approach became common after the April 2021 private sector reform, as organisations sought to minimise their compliance risk.
Why companies issue blanket bans
The primary driver is risk aversion. If a client incorrectly determines a role as outside IR35, they may be liable for the unpaid tax and NICs. By assessing everything as inside IR35, they eliminate this risk entirely. The cost is borne by contractors in the form of reduced take-home pay, and by the client in the form of higher gross rates needed to attract quality contractors.
Are blanket bans legal?
HMRC has stated that blanket determinations are not in the spirit of the legislation. Each engagement should be assessed individually based on its specific working arrangements. However, there is no explicit legal prohibition on blanket assessments, and HMRC has limited enforcement mechanisms to prevent them. In practice, many large organisations have moved away from blanket bans as they recognised the negative impact on contractor quality and availability.
How to respond
If a client issues a blanket inside IR35 determination, you have several options. You can accept the determination and negotiate a higher gross rate. You can formally challenge the determination, requiring the client to provide individual reasoning. You can choose not to work with that client. Or you can target smaller clients where the old self-assessment rules still apply.
The market trend
Several years after the reform, the market is gradually moving towards more nuanced assessments. Many clients who initially imposed blanket bans have since introduced individual assessment processes, often supported by external IR35 assessment tools and specialist consultants. The availability of outside IR35 roles has stabilised and in some sectors is increasing.