IR35 for hirers and UK businesses
What role do recruitment agencies play in IR35?
If a recruitment agency is involved in the supply chain, they hold the responsibility of being the fee-payer and processing the payments to the contractor based on their IR35 status. Certain agencies may also possess in-house IR35 expertise and assist their clients in determining the status of their contracts.
More detail
If a recruitment agency is involved in the supply chain, they are responsible for processing the payments to the contract as the fee-payer, depending on the IR35 status. Some agencies also offer some in-house IR35 expertise and help their clients with status determinations.
Where an engagement is for a medium or large company, and the assessment indicates "Inside IR35", the recruitment agency is responsible for the appropriate deductions for tax and National Insurance Contributions (NICs) and paying the tax to HMRC.
If the engagement is determined as "Outside IR35," then the agency pays the contractor gross (without tax deductions).
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