IR35 Public Sector Changes Effects

Going to lose clients

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Hi all

Not a question as such but more of a concerning point - do many other small firms deal with locums being paid by the NHS? We've quite a few on our books and it's come to light that from 6 April (with the IR35 changes) they'll only be paid if trading under an umbrella company not their own PSC. I can only assume this reduces the risk of the NHS making errors in deducting tax/NI and keeping track of the regulations.

This will effect our practice as we deal with around 20 PSC's, they'll have to dissolve and engage with an umbrella paying those extortionate fees and lose the benefits of running a PSC.

Not good for a small practise like ours...

 

Replies (15)

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By mrme89
15th Feb 2017 09:32

Given that it seems to be a large part of your practice, I am very surprised it has, in your words, 'come to light'.

For example, this was published in May last year:
https://www.gov.uk/government/consultations/off-payroll-working-in-the-p...

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Replying to mrme89:
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By bigmuggsy
15th Feb 2017 10:57

Pointless point to make, come back when you've got something constructive to say.

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Replying to bigmuggsy:
By mrme89
15th Feb 2017 11:27

It isn't pointless. had you been awake, you would have had nearly 12 months to diversify.

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Replying to mrme89:
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By bigmuggsy
15th Feb 2017 12:20

ha been awake who do you think you're talking to? It was a completely pointless point to make, if you read my post CORRECTLY I was aware of the changes however not aware that the NHS (or as pointed out by another person who replied with something relevant) weren't prepared to pay those trading as a PSC only umbrella - that is my area of concern and the reason for my post.

You seem quite an abusive person - if you'd like to visit my practice in Liverpool or send me a private message we can meet in person to discuss further.

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Replying to bigmuggsy:
By mrme89
15th Feb 2017 12:29

Hahahaha

Hahahaha

Hahahaha

Hahahaha

Hahahaha

Hahahaha

Steady on Rocky!

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Replying to mrme89:
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By bigmuggsy
15th Feb 2017 12:31

Ha ha ha ha ha

Keyboard warrior

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By JCresswellTax
15th Feb 2017 10:07

I presume all of your clients are contracting direct with the NHS then?

As if they are through an agency (which most are to be fair) then it is the agency decision to invoke this policy, not the NHS.

I would tell your clients to challenge this with the agency.

Also, you could consider starting an umbrella company for these clients?

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Replying to JCresswellTax:
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By David Heaton
15th Feb 2017 13:12

I have seen correspondence suggesting that it is indeed the NHS, rather than the agencies, that has imposed this policy. The NHS has rather jumped the gun, as the law will not change until April, but it was apparently insisting on payrolling through agencies from November onwards, even though there was no requirement and, in the case of PSCs, no vires.

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Glenn Martin
By Glenn Martin
15th Feb 2017 10:16

This is the danger of a contractor focused business as they are have been in HMRC/Governments cross hairs for some time now, so are only ever 1 budget away from potentially been wiped out.

For this reason i have focussed on other areas. I have about 30 contractors with maybe 8 medical professionals who will be effected.

Its not all lost though as all mine via an agency and its still going to be better for them than taking an employed position with NHS.

It just means there income will now be payrolled and so not as good as before but they will still need accounts doing etc for the company etc.

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Replying to Glennzy:
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By bigmuggsy
15th Feb 2017 12:30

Agreed, however one client has indicated that the agency won't pay them if trading as their own company - the point of my post. Therefore they have to close their company and engage an umbrella one, thus I'm losing that client. But as one of the above posts indicates it could be just the agency stipulating this which we'll challenge.

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Replying to bigmuggsy:
Glenn Martin
By Glenn Martin
15th Feb 2017 13:12

It is the agency responsibility to deal with the tax deduction. So the ones I have spoken with are offering 3 routes. I suppose some may not fancy the burden of operating the payroll side of it and push people to umbrella providers.

From a compliance point of view there are several cowboy operators of umbrella and agency firms who if deducting 40% tax + 2 lots of NIC from payments may well do a bunk after not paying 3 or 4 months deductions over.

If an agency only offers an umbrella route then I would imagine workers will migrate to ones offering a better option.

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By SteveHa
15th Feb 2017 13:35

Or as JCresswellTax suggests, form an umbrella for them, keep them as clients and manage the Umbrella yourself. For only 20 contractors it should be fairly easy.

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Replying to SteveHa:
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By bigmuggsy
15th Feb 2017 15:21

Thanks for this, that idea never occurred to me and I suppose will be a route some accountants might go down. I'll look into it.

Thanks for the comments and advise guys much appreciated.

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Replying to SteveHa:
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By I'msorryIhaven'taclue
17th Feb 2017 11:08

SteLacca wrote:

Or as JCresswellTax suggests, form an umbrella for them, keep them as clients and manage the Umbrella yourself. For only 20 contractors it should be fairly easy.

Wondering aloud, to what extent might operating an umbrella company make one subject to the employment agencies' rules? (I'm mindful that nursing agencies have to register with the Care Quality Commission.)

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By I'msorryIhaven'taclue
16th Feb 2017 16:39

I have two diverse cases involving (different) agencies which indicate a certain laxity:

Nursing Sister told by her agency to form a ltd company, and was assured by that agency that she would fall outside IR35. Agency issued no written contract whatsoever to nurse, in spite of our repeated requests, instead assuring her that by not having a written contract she will fall outside of IR35.

Written contract or not, our nurse most certainly falls within IR35, although I'm uncertain yet whether or why the agency believes it won't end up liable post-April for getting her status wrong. Time will tell.

The other is a physiotherapist whose agency advised her to register as self-employed. She has no other clients. Again there's no sign on the horizon of any change to her status.

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