Figures released show that locum pay has jumped by 6.3% since HMRC changed the person responsible for making the IR35 assessment. The NHS has not made an effort to review contracts with individuals but has insisted that temps and locums are paid through an umbrella company. As a result doctors have put their hourly rates up. In the three months since the change in the rules, the hourly rate increased by 6.3% to an average of £70.41 per hour, with consultants charging £96 per hour and some in high demand charging £213 per hour.
Have the criteria changed?
No, whether a contract is inside or outside IR35 has not changed but the person or body responsible for reviewing the contract and making the assessment has moved from the personal service company (or their accountant) to the NHS body.
Using the IR35 checker
The IR35 checker is full of flaws and based on reports released recently is barely used by the accounting profession as the results are so unreliable. The checker only seems to result in a contract being classified as outside IR35 if there is a clear right of substitution. However, the legislation and, more importantly, the case law in this area consider three key criteria: substitution, control and mutuality of obligation.
The British Medical Association has said, “IR35 has been an administrative disaster for the NHS and, as these figures show, it hasn’t reduced spending.”
If you would like a contract review for IR35 then please contact us.