The NHS have backed down in an argument with locums over the forced application of IR35 to medical staff. NHS Improvement gave advice to all NHS Trusts stating that they expected all contractors to fall within IR35 and therefore agency workers would have to work on payroll, on bank or via an umbrella. The locum doctors have successfully argued that it was unfair to tax them as employees as they received none of the benefits of permanent employment such as sick pay, maternity/paternity pay, holiday pay and other benefits.
Accountants have been advising that this advice provided by NHS Improvement was not correct and that many medical workers are outside IR35.
NHS Improvement have backed down and now say that their advice was, “not accurate” and therefore hospitals should decide on a case by case basis.
What happens now?
The NHS do not have the resources to review every contract with every agency worker. We at Clearways Accountants hope this will make the agencies take action. If they can get their standard contracts reviewed by a specialist firm of accountants or barrister then all their workers should be outside IR35 and everyone can go back to using their own personal service companies.
NHS Improvement have stated that they still expect agency medical staff to fall within IR35. We have been through the HMRC status questionnaire for a number of different medical practitioners; nurses, physiotherapists, cardiographers and radiographers and we believe most will be outside IR35.
What should you do now?
You should go through the HMRC status questionnaire and send the results to your accountant, they can then discuss the best course of action.
If you do not have an accountant then if the status indicator result is “outside IR35” or “unknown” you should contact your agency and discuss the possibility of using your own Limited company.
If you were thinking about liquidating your company you should wait and see what happens over the next few weeks before making that decision.
If you would like help in reviewing the results from your HMRC status questionnaire then please contact us for your free consultation.