From April 6th 2017, a new legislation will be put in place which will change the way a lot of locum social workers get paid. From this date, it will be our responsibility as the fee payer to determine whether our contractors fall inside IR35 or not.
As these changes apply to almost all placements in the public sector, it’s fair to say that social workers operating through a limited company will no longer be an option. Instead, it will be down to Charles Hunter Associates and other agencies like us to calculate and deduct your tax, unless you opt to use an umbrella company.
The HMRC guidance on deciding whether a worker falls inside IR35, is defined by the words supervision, direction, and control.
Supervision – Is there someone overseeing the work that you do?
Direction – Are you given directions or instructions on how the work is carried out?
Control – Does someone else dictate the work you do, how you do it, or have the authority to move you from one job to another?
If you answered yes to any of the above, I’m afraid you are probably inside IR35.
Sharing his views on the impending change, Charles Hunter Associates Managing Director Jonathan Wadsworth says the following:
“The new legislation affecting personal service companies’ contractors in the public sector is a slam on the recruitment industry as a whole and on hardworking social workers.
Making the recruitment agency become responsible for the tax of PSC puts unnecessary strain on smaller recruitment businesses such as ours when we are required to provide highly compliant staff at low margins.
Equally, hardworking social workers who are providing their services to the most vulnerable people in our communities are being attacked unnecessarily. The changes will result in reductions of take home earnings, which in turn may well lead to a reduction in the availability of temporary social workers. Their jobs are highly stressful and pressured, so this change is not a welcomed one for them.
Any drop in availability of temporary social workers will affect the ability of Local Authorities to deliver frontline services. The recruitment industry is worth £35billion a year, contributing more to the British economy than several other key industries, and significantly more than any so called IR35 tax deficits, so why the government is continuing to put unnecessary strain on it is beyond me.”
Over the coming weeks, we will be working closely with our contractors to make sure this change doesn’t have a significant impact when April 6th approaches.
If you are not yet registered with us and need help or advice on how the IR35 legislation changes will affect you or how to proceed, email email@example.com for guidance.