What locum social workers need to know about IR35 tax changes

A sponsored feature from Caritas

Description of image used in Caritas sponsored feature happy children lying on grass
Photo: Caritas

By Debbie Smith, CEO, Caritas

Last autumn the government confirmed its intention to push ahead with new rules surrounding the IR35 tax status for temporary workers working in the public sector.

Confusion and uncertainty seem to have surrounded the changes and many local authorities and locum social workers are still unprepared for the changes, which are nearly upon us.

The new rules come into force on 6 April and will mean that public sector clients will be responsible for determining whether a locum social worker is caught by IR35 or is genuinely self-employed.

Where a social worker is deemed to be caught by IR35, the fee payer – usually the recruitment agency – will be responsible for deducting and paying tax and NI contributions from their pay much like a standard employer.

While there are still questions left unanswered, we have put together an IR35 guide for locum social workers that answers the most frequently asked questions about what the changes could mean for them.

What should I do now?

We recommend that you clarify your IR35 status from your end client (the public sector or authority) as soon as possible so that you have time to make changes to the way you are paid, where appropriate.

This legislation takes effect in just three weeks and if IR35 applies to your assignment any payment made after Thursday 6 April will be subject to full tax and National Insurance.

If you are looking for payment comparison advice (PAYE v umbrella v PSC) or would like to discuss your circumstances, email us at IR35queries@caritas-recruitment.com – you don’t have to be a Caritas locum, we are happy to help!

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3 Responses to What locum social workers need to know about IR35 tax changes

  1. Artwell Moyana March 16, 2017 at 8:02 am #

    I would like to know more about the IR35.

    • Zoe March 21, 2017 at 9:13 am #

      Hi Artwell. There is a link in the article to contact Caritas for more information. Thanks.

  2. Victoria April 10, 2017 at 5:25 pm #

    Before making a decision, please check ALL of the ways of how you can be paid, if you’re deemed as within IR35. They are 3 ways of being paid via Umbrella PAYE, Agency PAYE and Limited Company. As a locum social worker, I had to force my recruitment employment agency to get these pay rates as they will not naturally give them to you as they will want you to join their ‘preferred’ umbrella companies. All pay rates are different dependent on whom pays the national insurance – both employers and employees – tax as well as insurances. Compare the benefits of each pay stream – some umbrella companies are offering discount deals, amount of paperwork involved (if plan to stay with your limited company) or you may get a pension, if you decide to go via your agency’s PAYE. I’m no expert on this and the information out there isn’t clear.

    I feel locum social workers have been left in the dark on this IR35 with varying advice given – which is isn’t ideal. This is particularly hard to sort out if you’re working on cases!

    Another blow to a sector which is already stretched and stressed with an added pressure with IR35 – which isn’t good.

    For me, I went with an umbrella due to the need to get paid on time! This is not a long term solution for me but will give me time to plan my future. Many social workers I have spoken are considering their future too and some wish to get out of it all together!

    This advice probably comes too late -as its 10th April 2017 and IR35 rules began as from 6th April 2017. However, you should be still able to make changes even now, but may delay your payment of wages, but do not forced to take make a hasty decision on how to get paid. We always advise our service users to make informed decisions and now we social workers should take our own advice!

    Good luck :-)