IR35 and Remote IT Developers: Quick Guide

Katarzyna Pilarska
Aug 14
4 min read

Do IR35 Rules Apply to Polish B2B Developers Working Remotely?

IR35 reforms have brought uncertainty for UK IT companies hiring contractors. This article clarifies when IR35 applies, whether it affects remote Polish B2B developers, and how UK firms can hire globally with confidence.

What Is IR35 and Who Does It Affect?

The IR35 legislation—also known as the “off-payroll working rules”—is one of the most significant regulatory challenges facing UK businesses that rely on contract workers, especially in the IT sector. Introduced to counteract “disguised employment,” IR35 is designed to ensure that contractors working like employees pay broadly the same income tax and National Insurance contributions as permanent staff.

Who Does IR35 Apply To?

According to HMRC and as explained in the comprehensive Daniel Wolfson guide, IR35 applies when:

A worker provides services to a client via an intermediary (usually their own limited company, known as a PSC—Personal Service Company).
Were it not for the intermediary, the worker would be considered an employee for tax purposes.

From April 2021, and with additional tightening in 2025-2026, responsibility for determining IR35 status falls on the “end client” if the client is a medium or large private-sector business, as defined by the Companies Act 2006.

If the role is inside IR35: The worker is taxed as an employee; the fee-payer (often the client or recruitment agency) must deduct income tax and NICs.
If the role is outside IR35: The contractor can pay themselves through dividends and salary, enjoying a more favourable tax position.

Does IR35 Apply to Polish B2B Developers Working Remotely for UK Companies?

A common question for UK IT leaders: If I contract a Polish developer (as a B2B contractor) who works remotely from Poland, do I need to worry about IR35?

Key Points from the Kingsbridge Guide:

The Kingsbridge IR35 Guide for Overseas Contractors and End Clients addresses this scenario in detail:

IR35 is UK legislation and typically applies only to UK tax residents and services performed within the UK.
If the contractor is based outside the UK and provides all services remotely from Poland, with no UK intermediary or permanent establishment in the UK, IR35 does not apply.

Critical Factors:

Location of Work:
- If a Polish B2B contractor works exclusively in Poland and does not travel to the UK, IR35 will not apply to this arrangement.
- If the developer spends significant time working physically in the UK, IR35 could potentially apply.
Contract Structure:
- Contracts should be signed directly with the Polish contractor’s business (a Polish limited company or sole trader), not via a UK PSC.
No UK Entity:
- There must be no UK-based intermediary or “permanent establishment” (branch, office, or tax presence) acting as the fee payer.

Kingsbridge summarises:"Where services are provided by an overseas contractor, with no presence in the UK, IR35 should not apply as the worker is not a UK tax resident and no UK intermediary is involved."

What About Compliance for the UK Company?

UK companies must ensure that contracts and payment processes clearly reflect an overseas service provision. As Daniel Wolfson’s 2024-25 analysis notes, “Documentation should be thorough to show HMRC that services are genuinely performed overseas.”

It is prudent to:

Avoid bringing the contractor into the UK for work.
Maintain clear records of place of performance.
Confirm that the contractor is responsible for their own tax and social security in Poland.

Is IR35 Driving UK IT Firms to Polish B2B Developers?

IR35 Risks for UK-based Contractors

For UK IT companies, the administrative and financial risks of misclassifying UK-based contractors are rising. In 2025-2026, HMRC is stepping up enforcement, requiring more frequent status determinations, detailed records, and evidence of “reasonable care.” Mistakes could result in significant back taxes, penalties, and even reputational damage.

As Business Insider recently reported, “Nearly 40% of UK tech firms plan to reduce their use of domestic contractors in 2025 due to ongoing IR35 uncertainty.” Firms are looking abroad for flexibility and cost savings.

Advantages of Hiring Polish Developers Remotely

1. No IR35 Difficulties

Hiring Polish developers under a B2B (business-to-business) contract structure and ensuring work is performed in Poland neatly avoids IR35 rules. The contractor pays taxes in Poland, and the UK company avoids additional tax and administrative burdens.

2. Cost Efficiency

Polish developer rates are on average 30-40% lower than in the UK, according to Puls HR and The Economist. With no employer NICs or pensions, UK companies can cut costs while retaining quality.

3. Wide & Experienced Talent Pool

Poland is home to over 430,000 skilled IT professionals, many with experience in cloud, fintech, and cybersecurity. English proficiency and a collaborative work culture make integration smooth.

4. Flexible Engagement

Polish B2B contracts allow for scalability—ideal for project-based or ad hoc work, and suited to rapid, agile business models.

5. Reduced Compliance Overhead

No need for complex status determinations, regular reviews, or engagement with HMRC’s CEST tool—reducing legal spend and HR headaches.

How UK IT Firms Can Engage Polish Developers—Compliantly

Work with Reputable Polish Partners:
Use vetted agencies or directly contract with established Polish companies.
Document Everything:
Keep contracts, evidence of remote work location, and payment trails.
Respect Local Law:
Ensure the contractor is compliant with Polish tax and legal requirements.
Avoid UK Presence:
Do not invite contractors to work in the UK, even temporarily.

IR35 applies to UK-based off-payroll workers, not to Polish B2B developers working exclusively from Poland. UK IT firms can safely and compliantly hire top Polish talent—reducing cost and risk while maintaining flexibility.