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NHS Workforce Development 28/06/2016
- 2. Trusts have seen risks evolving during the last 18-24 months. 1999 Inland revenue briefing note 2000 IR35 Introduced 2012 HMT announced tax review July 2015 HMRC issued discussion document Nov 2015 Monitor price caps introduced Feb 2016 Monitor issued guidance re use of PSCs March 2016 Budget announces IR35 liability being transferred Locums have had these risks for over 16 years Pioneering reinvestment into our NHS
- 3. April 2017 IR35 assessment required before booking any locum What does this mean for your Trust? Pioneering reinvestment into our NHS
- 4. Gaps in rota identified No substantive or bank available Trust identify suitably qualified locum Understand how the locum is being paid If via a PSC – Trust/Agency must perform IR35 test If PAYE – no IR35 obligations Passed: continue to tax themselves via the PSC Fails: they must be taxed as PAYE How can Trusts manage this? Understand how the locum is being paid If via a PSC – Trust/Agency must perform IR35 test If PAYE – no IR35 obligations Passed: continue to tax themselves via the PSC Fails: they must be taxed as PAYE Pioneering reinvestment into our NHS
- 5. Current viewPost April 2017 view Example Trust 20% Umbrella PAYE workers No saving No IR35 Risk Traditional Trust Model AgencyTrust Brookson Model 75% of which fail IR35 25% of which pass IR35 80% PSC workers 75% of which fail IR35 What happens now? Pioneering reinvestment into our NHS
- 6. Deemed Payment Stay as PSC but Trust/Agency facilitate PSC obligations still apply Trust PAYE Become temporary employee Increased HR risks and admin for Trust Agency payroll Agency takes on increased cost and risk of employment Umbrella PAYE Cost to worker for admin and accounts Pioneering reinvestment into our NHS
- 7. Example Trust 15% PSC workers non compliant (5% workers passed) 80% Umbrella PAYE workers 14% efficiency saving No IR35 Risk 14% efficiency saving No IR35 Risk Brookson Model Post April 2017 view Trust Deemed Payment Trust Brookson employ Pioneering reinvestment into our NHS
- 8. What happens next? Frameworks and NHS Improvement enforcing compliance with obligations onto agencies from November 2016 On-going consultation Online portal being developed Draft legislation available around Autumn statement Pioneering reinvestment into our NHS