After the new legislation, those outside of IR35 can still be employed as contractors and be paid without tax and NI deductions. Those now within the legislation will have these deductions akin to any other employee. It is thought these changes will change the normal interaction of limited companies with organisations in the healthcare sector due to the holes which have now been closed, potentially limiting the freedom of employment and casual work opportunities for private contractors. However, the guidelines of the legislation can be slightly ambiguous, and thus it is vital employers and the contractor are both concrete in their understanding of the guidelines.
To curtail the measures of the new legislation, it appears healthcare companies may employ individuals under the PAYE scheme OR through an umbrella company and thus are sub contracted. For example, nurses who are employed by an agency or company that deals directly with a care home will likely be fine, as the company will individually sort employee tax and NI deductions. However, a nurse who still wishes to remain independent and act as a contractor will need to complete a self-employment assessment like any other self employed individual. This is known as the PAYE scheme which involves contributions based on your tax return, sent to HMRC.
It appears this new legislation is set to affect every NHS trust in England, as well as the majority of private healthcare companies and community pharmacies who rely on regular part time, bank and locum staff to deal with demand. Some NHS trusts are registering with reliable suppliers, and then directing their current contractors to trusted suppliers who can employ them directly to maintain important factors like patient familiarity and service delivery. It is said that the HMRC will also be rolling out a new online calculator to decide the status of contractors as to whether they are ‘in or out’ of the new IR35 guidelines. For more information on the changes, please follow: https://www.gov.uk/guidance/off-payroll-working-in-the-public-sector-personal-service-companies
We will be monitoring the situation and updating in due course as to the affect on UK healthcare, community pharmacy and NHS trust service delivery as time progresses.