NHSI had previously advised NHS providers “to ensure that all locum, agency and bank staff were subject to PAYE and on payroll for the new financial year.”

However it has now confirmed that this blanket approach was too simplistic, and that an assessment of whether or not IR35 applies should be carried out on a case-by-case basis, rather than by a broader classification of roles.

It requires this assessment to be “conducted fairly, accurately and take into account all relevant factors, including representations which may be provided by the individual”, and suggest that the HMRC online tool is used (www.gov.uk/guidance/check-employment-status-for-tax), but warns that this “does not negate the necessity for careful case-by-case scrutiny.”

Whilst NHSI suggests that this rule change has “substantial administrative implications for providers”, in practice, most NHS bodies will already be complying with these requirements if they:

  • Review all of their off payroll working arrangements
  • Complete the HMRC online tool for any cases where there is doubt as to IR35 status
  • Provide the individual/the agency with an opportunity to comment on/discuss their assessment of whether or not IR35 applies; and
  • Consider whether to revise the assessment in light of the comments provided.
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.

If you’d like to discuss the support that would be most suitable for your Trust please contact Peter EdwardsJacqui AtkinsonLaura Horovitz or Andrew Uttley