The New IR35 Rules for IT Directors and Managers Explained

The New IR35 Rules for IT Directors
and Managers Explained

Up to April 2021 the contractor is responsible for figuring out if they fall inside or outside IR35 and then paying their taxes accordingly.The new IR35 legislation (to be introduced in April 2021) shifts responsibility for assessing IR35 obligations from the contractor to the company that uses the contractor.

That directly impacts on IT Directors and Managers who are in recruiting positions and, as such, are responsible for hiring individuals.

Therefore, if you are an IT Director or Manager who directly recruits a contractor you will become wholly responsible for their IR35 determination.

Hiring Managers will be responsible for:

Assessing whether the contractor falls ‘inside’ or ‘outside’ IR35
Working out who the fee payer is (such as an intermediary recruitment business or agency that pays the contractor.)
Ensuring the salary payer calculates the correct tax and NICs for any contractor who is deemed to be ‘inside’ IR35 and paying these straight to HMRC, without deductions from the contractor’s fee.