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.