On the 6th April 2017, the Government brought in new IR35 tax for all agency workers who work for the NHS via their own limited companies (PSC).
Any locum role that is considered to be “within IR35” will have to have PAYE tax and national insurance contributions deducted at source. A candidate will be “within IR35” if they are subject to the supervision, direction or control of the client.
What do the new rules say?
- The NHS trust will have the responsibility to determine whether or not a role is considered to be “within IR35” and will need to communicate this to the recruitment agency. As stated above, we have been advised that all medical locum and nursing roles will be considered to be within IR35.
- For any payments made by a Trust or a recruitment agency to a PSC on or after 6th April 2017, it will be necessary for them to deduct PAYE income tax and NICs at source, prior to a payment to your PSC.
- The new rules apply to all payments made on or after 6th April 2017, even if the work was done before that time.
- If you are placed at a Trust via your PSC, you can still be paid to that PSC but due to the need to deduct PAYE tax and national insurance the current tax benefit of the PSC will be lost.
We have spoken to all the major umbrella providers to explore what they can offer. As each Umbrella company is subject to the same legislation, we do not expect any major difference (if any) between the take-home pay calculations through the different umbrellas. We anticipate that an umbrella company’s quality of service, experience and reliability will be the key factors for candidates.
If you want to continue working via your PSC you can do so subject to confirmation from the Trust, but the new tax rules will apply to you as described above. We expect that there may be NHS Trusts who will now refuse to accept any candidates via a PSC.
DRC have researched the best Umbrella products/providers who we believe will meet all the requirements of our candidates, have significant experience in the medical sector and provide a reliable, high-quality service.
If you have any questions please do not hesitate to call/email your Recruitment Consultant or alternatively contact our dedicated IR35 helpline on 01908 545 940.