Blame IR35?
Yep and it couldn't happen to a nicer department (not) first.
They could recind their IR35 crackdown if the cost of the failed system in customs revenue exceeds what they might most optimistly hope to rake in from contractors but they won't. A decision like that requires at least two working brain cells all of which HMRC seem to have flushed down the lavvy.
Do we feel sorry for them (HMRC)?
Like hell we do.