IR35: NHS U-turn over blanket IR35 decisions for contractors

The NHS has decided to revise its decision to place all contractors inside IR35, a great sign for all UK contractors.

Leading contractor tax adviser, Qdos Contractor has welcomed news today that The NHS has revised its decision to place all locum and contractor staff inside IR35.

In ‘Working through intermediaries: IR35 update’, released today (30/05/2017) The NHS reveals they had ‘anticipated that providers would need to ensure that all locum, agency and bank staff were subject to PAYE and on payroll for the new financial year.’

However, they then admitted blanket IR35 determinations were ‘not accurate’, and now plan to carry out decisions ‘in a fact-specific way’, stating that decisions ‘should be applied on a case-by-case basis, rather than by a broader classification of roles.’

The NHS also went on to state; ‘This consideration must be conducted fairly, accurately and take into account all relevant factors, including representations which may be provided by the individual.’

Qdos Contractor CEO, Seb Maley immediately welcomed the U-turn, ‘That an organisation of the sheer size and influence of The NHS has revealed it is to re-think its approach to IR35 decisions is great news for all public sector contractors and the public sector itself.

‘Prior to recent reform, a staggering 85 per cent of contractors stated they would stop working in the public sector should they be placed inside IR35. And contractors are vital components of all major public sector projects, particularly The NHS.’

Maley adds, ‘The final legislation clearly stated that ‘reasonable care’ had to be taken when making decisions over the IR35 status of public sector contractors. Put simply, this means that public sector employers and agencies should not make blanket determinations.

‘Going forward, assessing contractors on a ‘case-by-case’ basis will prevent them all being unfairly tarred with the same brush, and will only go to benefit The NHS, and hopefully set a marker down for every public sector organisation.’

Further reading on IR35

Owen Gough, SmallBusiness UK

Freddie Halvorson

Owen was a reporter for Bonhill Group plc writing across the Smallbusiness.co.uk and Growthbusiness.co.uk titles before moving on to be a Digital Technology reporter for the Express.co.uk.

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