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IR35 Regulations - Duties of clients and fee-payers
IR35 Regulations - Duties of clients and fee-payers
Rebecca Russell avatar
Written by Rebecca Russell
Updated over a week ago

When an employer engages with an intermediary, a supply chain is created. Each part of the supply chain has duties to fulfil, but IR35 regulations are specifically centred around the client and the fee-payer, as these have some particularly important duties under IR35.

What end-clients need to do

If you're the end client, i.e. the organisation that the individual is providing services for, then it is your responsibility to:

  • Decide the employment status of the worker using the CEST tool before the contract begins

  • Share the status determination with the fee-payer (if they are not the fee-payer), worker and any intermediary they work for

  • Keep detailed records, including records of the CEST tool, of determination and fees paid

  • Have processes in place to deal with disputes regarding status determination

Tip: IR35 Regulations apply to those workers with UK tax liability only. This means that if you have contractors whose tax liability falls outside of the UK, IR35 regulations will not apply.

What fee-payers need to do

If you're also the fee-payer, i.e., the final step in the chain providing the intermediary with the payment for the individual, then it's your responsibility to:

  • Calculate the deemed payment for tax and National Insurance purposes

  • Deduct these amounts from the payment to the intermediary

  • Pay employer National Insurance contributions

  • Report deductions via RTI

  • Calculate any apprenticeship levy

Note: You can't claim employment allowance against these employer National Insurance contributions.

Still unsure?

IR35 regulations are complex, so HMRC has a number of ways for you to contact them with your queries.You can find this information on their website.

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