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