Page 7 - Addition Autumn 2017
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IR35 AND THE IMPACT ON THE PUBLIC SECTOR
On 6 April 2017 changes to the IR35 legislation came into effect. Consequently, public sector bodies and agencies such as GP practices are now responsible for de ning whether an off-payroll worker is employed or self-employed. Here we look at the potential impact on medical practices and their workers.
What is IR35?
The IR35 legislation,
which has been in place since April 2000, seeks to prevent a tax advantage being gained by workers, who would normally be considered employees, providing their services via a limited company.
Previously it was the responsibility of the worker to determine whether or not IR35 legislation applies to their limited company. These changes have shifted the obligation, and the accountability, to the public sector body.
The government has produced an online tool to help decide whether the IR35 legislation applies.
It takes into account
a number of factors including:
THESE CHANGES HAVE SHIFTED THE OBLIGATION, AND THE ACCOUNTABILITY, TO THE PUBLIC SECTOR BODY.
• Mutuality of obligation
• Right of control
• Right of substitution
• Provision of own equipment
• Integration into the organisation
It can be found at www. tax.service.gov.uk/check- employment-status-for-tax/ setup
What are the implications?
In the simplest terms, individuals who are now considered employees under the new rules and the public sector body are subject to higher taxation. PAYE and Employee NICs will need to be collected from the individual and the public sector body will have to pay employer NICs and will be responsible for reporting under Real Time Information (RTI) through their payroll scheme.
Whether or not your non-payroll workers should be considered employed it is essential that you should complete the HMRC tool and keep a printed copy of the results. Simpkins Edwards LLP can advise practices and medical professionals on the impact of the new IR35 changes and other tax/accountancy matters. For more information contact Sebastian Beard (GP/ Locums) or Mark Simic (Dental/Private Medical).
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