Further requirements for NHS providers wishing to engage off-payroll workers16/03/17
We recently alerted you to changes to the IR35 rules in respect of the taxation of off-payroll workers. NHS Improvement has now introduced further requirements for NHS Trusts and NHS Foundation Trusts wishing to engage workers through intermediaries such as Personal Service Companies. Jim Mackey wrote to Trust CEOs on 27 February to say that:
‘Providers are strongly encouraged to ensure that all staff are contractually paid via PAYE mechanisms. Where this is not the case, trusts should seek approval from NHS Improvement to pay via alternative means. The Agency Intelligence Team will contact trusts shortly with further guidance around the approval process.’
NHS Improvement has now issued details of the approval process that Trusts will be required to follow when engaging staff through Personal Service Companies (PSCs) or Limited Liability Partnerships (LLPs). You can see the NHS Improvement assurance documentation here. The application for approval requires Trusts to answer 5 questions, namely:
- Detail the changes made to your payment processes to ensure the correct tax and National Insurance is deducted from personal service company invoices where the worker is directly engaged with the trust.
- Detail the steps that have been taken to ensure agencies and outsourced bank providers supplying the trust are correctly deducting tax and National Insurance from workers engaged via personal service companies.
- Provide a copy of the internal escalation process the trust follows to approve the engagement of a worker through a personal services company, rather than via PAYE on the trust payroll/bank. Include position of ultimate decision maker.
- Provide details of the internal process to evaluate and confirm the IR35 status of roles at the trust.
- Provide details of the roles that have been found to be outside IR35.
How Capsticks can help
As part of our package of IR35 support for public sector employers we can help NHS Trusts and Foundations Trusts by:
- Providing training for your HR and payroll teams so that they understand what changes they need to make in order to comply with IR35 and NHS Improvement requirements;
- Helping you to determine whether workers are in or out of scope for IR35.
- Drafting template letters to go to workers who will be covered by the new IR35 rules;
- Reviewing your contractual arrangements with agencies to ensure you comply with your obligations under IR35 and can provide NHS Improvement with the required assurance in respect of off-payroll engagements.