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IR35 tax reforms – what will they mean for locum healthcare workers?

Locum healthcare professionals, as well as other public sector contractors operating through their own limited company (PSC), are very likely to be affected by HMRC's upcoming 'Off-payroll working in the public sector; IR35 reform'.

Current proposals

The picture at the moment strongly suggests that the IR35 reform will come into force in April 2017. This will place the responsibility of IR35 determination on recruitment agencies or public sector employers. Should a recruitment agency or public sector body classify a locum’s contract as “caught” by the IR35 legislation and therefore deemed as an employee for tax purposes they will have to deduct full PAYE and National Insurance (NI) as they would for a worker.

This means all public sector workers operating through their own limited company will no longer be responsible for identifying the IR35 status of their contract.

For our locum healthcare workers operating as such, Sanctuary Personnel will be responsible for identifying when IR35 applies, calculating tax and NI deductions and paying these to HMRC through a new portal expected to launch in beta-phase over the coming weeks.

Financial liability for any IR35 status assessed inaccurately will lie squarely with either the recruitment agency or the public sector employer. This means locums will not have to pick up any shortfall in PAYE and NI should their IR35 status be incorrect.

What happens next?

In real terms, the majority of locum healthcare workers will already fall within IR35 and already be operating their limited companies accordingly.

Sanctuary Personnel is already in a strong position to implement the changes and is in the process of establishing a robust in-house process to make sure we comply with the impending changes.

As a leading recruiter of healthcare professionals in the UK, we will be offering as much support as possible to our candidates as news of the changes un-fold.

Join our online discussion

In addition to a series of blogs and mailers, we ran a webinar on the changes on Tuesday 29 November. You can view the replay, or download a written transcript of the discussion. Alternatively, if you have any pressing questions about the IR35 reform, fill in the form below.

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