IR35 U-turn has caused agency social workers stress and anxiety, warns BASW

Association criticises "entirely avoidable mixed messaging" following government decision to scrap tax status rules on 23 September and reverse this on 17 October

A Black social worker looking downcast
Photo posed by model (credit: digitalskillet1/Adobe Stock)

Should the IR35 rules for agency social work be scrapped?

  • Yes (71%, 857 Votes)
  • No (29%, 352 Votes)

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Agency social workers have been caused stress and anxiety by the government first deciding to scrap existing IR35 rules and then reverse this in just over three weeks, the British Association of Social Workers (BASW) has warned.

BASW said ministers’ decision-making had led to “mixed messaging” for staff that was “entirely avoidable”.

It made the comments after incoming chancellor Jeremy Hunt this week U-turned on predecessor Kwasi Kwarteng’s decision to scrap 2017 rules brought in to govern agency work in the public sector, in the latter’s so-called mini-budget on 23 September.

The U-turn means that employers will remain responsible for ensuring that agency workers who provide their services through a company pay appropriate levels of tax. Under Kwarteng’s plan, this responsibility would have passed to the worker, though the underlying principle of IR35 – that agency staff working in the same way as employees should pay equivalent levels of tax – would have remained.

A BASW spokesperson said: “The conflicting communication coming out of government and the Treasury in recent weeks has caused agency social workers increased anxiety over their status and added stress to their long-term planning. We are helping as many practitioners as we can but we are clearly seeing the impact from this mixed messaging, which, frustratingly, was entirely avoidable.”

In response, a Treasury spokesperson said: “With or without the reforms, the underlying rules on off-payroll working are unchanged – anyone working like an employee should pay similar tax as someone who is directly employed.

“HMRC continues to provide support and help to any individual or employer operating under the rules.”

The Treasury said there were no plans to revisit scrapping the existing rules.

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40 Responses to IR35 U-turn has caused agency social workers stress and anxiety, warns BASW

  1. A October 21, 2022 at 1:37 pm #

    And what are us social workers going to do about it? Nothing as always. We let this government treat us terribly but do nothing to stick up for ourselves.

    • Craig October 21, 2022 at 6:45 pm #

      An agency worker isn’t in the “we” club by dint of choosing to be paid differently from “us” to offset personal tax liabilities. So yes we aren’t going to do anything about it but look to better our pay and conditions as permanent workers.

    • Temisola Ebunoluwa October 24, 2022 at 11:12 pm #

      Request for a general election. We need to speak up

  2. Georgie October 21, 2022 at 3:43 pm #

    I honestly do not understand how being paid via agency works. I started 3 months ago to earn money for my masters and its just ended in so much confusion and a letter from HMRC sounding the alarm. It’s SO confusing and I don’t understand how people make agency work financially lucrative.

    • Rhys October 24, 2022 at 6:15 pm #

      Always check the umbrella company you’re using has a professional passport registration or is FCSA accredited. Then you know you’re working with a government compliant umbrella company who is paying the right taxes. Some agencies will sign you up with dodgy umbrella companies as they’re making a bonus from referring you. These can be up to £500 per person.

  3. Zahra October 21, 2022 at 4:07 pm #

    Confusing yes, but certainly not lucrative. In fact you end up worse off than a permanent employee because you are deducted employee as well as employer NI on top of the usual taxes. Most people choose to be locum because of the flexibility and being able to leave when you have had enough.

    • Shel October 21, 2022 at 7:38 pm #

      I think it purely depends on the hourly rate of pay. I was permanent, take home monthly was just short of 2k, where as now I am agency now, gain around 800 more per month, on a rate of 37ph. I also have 3k in holiday pay, have worked since end of march.

      • Liz October 25, 2022 at 3:37 am #

        Do you have the luxuries like Bank Holiday. pay, Sickness pay., maternity pay., Annual Pay Increase, 4-5 weeks Annuel Leave with full pay .and less complex workload as perm social workers?

        Can that extra 800 you make up for when you are unable to work? This is the inherent risk many cannot afford to take as locum Social workers.

        As the saying goes. all that glitters is not gold.

        • Simon October 26, 2022 at 9:50 am #


    • Temisola Ebunoluwa October 24, 2022 at 11:13 pm #

      Very true. Well said

  4. Dave October 21, 2022 at 4:13 pm #

    Individual people are not companies and IR35 is just a tax avoidance measure. I have serious reservations about the integrity and moral fibre of social workers, who should be committed to social justice, using this. The Government reached the right decision, belatedly

    • Tom daily October 21, 2022 at 5:42 pm #

      However they have not applied the same rules to private sector so they can carry on avoiding tax..they pick on the easy targets in the public sector. I have been self employed social worker in the past and paid tax legitimately. I was able to claim some expenses, not many and the lucrative gravy train people felt it was is rubbish. The vast majority complied with the tax system.

      • Alan Phelps October 22, 2022 at 7:32 am #

        The rules are the same in the private sector.

        I’ve been a contractor for 25 years. I still have a limited company but at the moment work through an inside IR35 contract. Tax is deducted at source which is fine by me. I am relieved of the necessity to administrator tax and don’t even have to raise an invoice. I do the same work as permanent employees and am paid more for the flexibility I offer the end client.

        Just because you don’t like paying taxes or disapprove of what they are spent on, it doesn’t give you the right not to pay them.

      • Philip October 22, 2022 at 9:17 am #

        They have had these rules for several years actually

      • Dave October 22, 2022 at 9:22 am #

        The rules do apply to medium and large sized businesses in the private sector

    • Lea October 21, 2022 at 6:16 pm #

      The integrity and moral fibre? Really Dave? Agency or permanent, most social workers in excess of their hours every single week just to keep a float. The issue isn’t with the individuals it’s about a government who continues to want more but not match that in pay and reward!

      • Dave October 22, 2022 at 9:08 am #

        What has anything you’ve just said got to do with my substantive point? Which is that individual people are not companies and that IR35 is just a tax wheeze.
        You complain about how the Government treats social workers but then defend a system which perpetuates unfairness

      • Ian October 23, 2022 at 12:25 pm #

        Well said !
        I’m so fed up of people slating agency workers.
        People may not be businesses but they certainly have the right to manage their own tax affairs instead of some “umbrella company” profiting and grabbing a cut of let’s face it hard earned wage.
        Plus to judge someone’s moral fiber because of it is out of order and ignorant.

        • Arthur October 24, 2022 at 10:27 am #

          PAYE is a way of managing tax affairs. If you don’t do that the argument isn’t about managing your tax affairs but something else isn’t it? Own it then you won’t have to feel you need to justify it. Get your own private police force, never set foot in an NHS hospital, have a private GP, send your children to fee paying schools. Simple really.

    • Robert Patterson October 21, 2022 at 6:40 pm #

      What drivel you talk! 52% tax to pay back into a broken system we support.

      • Dave October 22, 2022 at 9:16 am #

        I’m not quite sure how you’ve reached the 52% calculation. I can’t reply in a meaningful way because there is no reference to that number in any IR35 documentation that I’ve read

    • Paul w October 21, 2022 at 9:16 pm #

      So you also pay employers national insurance contributions out of your wages, like others who are wrongly forced under IR35? No didn’t think so.

    • Eggybread November 7, 2022 at 9:38 pm #

      Yes! Refreshing to see. As social workers to be intentionally avoiding tax which ultimately funds services… Just immoral. Absolutely indefensible.

  5. Yatheesh Sivanandan October 21, 2022 at 4:46 pm #

    Because of IR35 regulations, Local Authorities were not employing people who have set up their own private Ltd.companies instead through umbrella companies. The umbrella companies rip off the individual companies by taking out 1. Tax, NI ( for employee and employer) and service charge. This will amount to nearly 45% of salary will go.
    Where as if a person is remitting the tax and NI through their own accountant, they will be able to reclaim some of their expenditure and the service change the umbrella companies are charging. There is a huge difference .IR35 gave a chance for Umbrella companies to make huge sums out of hard working people

  6. Caren Culley October 21, 2022 at 5:19 pm #

    I resigned from social work when IR35 was introduced. On IR35 I was very much worse of financially than a permanent SW. This is because I had to pay for my own pension but was but given the % contribution from the LA as a permanent worker. My hourly rate included payment for any holidays, therefore I needed to save up to take any holidays and certainly couldn’t afford the weeks permanent staff enjoyed. I also needed to save for time off with sickness as I could not claim this from the LA. Additionally, I could not access any training having to pay for any independently, as well as paying for an accountant etc. Furthermore contract workers have little say in caseloads, complex cases etc. IR35 made contract working unviable for me.

  7. Sandra October 21, 2022 at 6:40 pm #

    BASW has a conflict of interest on this issue which should be made clear when they comment on umbrella companies and euphemistically termed ‘independents’.

  8. Robert Patterson October 21, 2022 at 6:46 pm #

    Contract work is becoming worthless. The only way to survive is to start charging over the odds to make up the shortfall in added tax and costs. So SW charging now up to £59 per hour, HoS roles now at £600 to £700 per day and AD roles upwards of 1k a day. God knows what DCS are on now? 1.5k a day? Maybe similar to London lawyers. Even perm posts for resi managers are £60k a year for one home. LA’s can’t put out perm jobs advertising wages like this… no political will. So agency prevails. Each LA is even competing against each other. All are paying 15% salary upgrade and retention. Agencies are now charging LA’s 30% for agency staff to go temp to perm. Shocking. The whole recruitment, retention piece is broken.

    • Vaughant October 23, 2022 at 9:55 pm #

      I think this is the point a lot of folk are missing, it’s that when companies put you inside, usually with little or no consultation, the inevitable threats to leave begin and a rate is agreed to cover the huge losses incurred by not being able to claim pre tax expenses and so forth. Henceforth, the price of literally EVERYTHING goes up. Lorry driver on £20/hr outside? Now on £30/35 inside. Shortage of foreign drivers? Nonsense, the biggest reason people left was a change to IR35, well documented online. Oil and gas industry getting tough and putting everyone inside? Great, until they realise they cannot get the skills needed as all the maintenance staff have gone to work in industry on an outside contract for way more than an offshore dayrate (I know, I did it). I’ve had maybe 5 offers this year to go back and my first question is “inside or outside”. I’m not back so you know the answer!!!

      The pandemic quickly proved contractors are not treated in the same way as perm employees, far from it,yet are now expected to pay the same tax and NI for no gain?

      I’ve avoided inside gigs and will continue to do so. I’ve had to totally change how I work, it’s risky, no set hours, direct invoicing, paying substitutes etc but it’s worth it in the end. I’ve gone from a maintenance engineer/improver to a projects role, design role and a consultancy role across 3 different businesses. I’m lucky in that manufacturing has been decimated in recent years so there’s ample opportunity to go into a struggling business and turn it around.

      Employers love contractors. They ask us to do something, it gets done, they ask perm staff, they find everyway they can not to do it.

      Roles maybe similar but they’re very much not the same.

  9. Alan Phelps October 22, 2022 at 7:24 am #

    Why should agency workers be taxed less than anyone else?

    Why does operating within IR35 cause any stress at all? If your contract is inside IR35 you work for an umbrella company or agency who deal with all your administration and taxes. In fact it is less stressful than working through your own limited company? But yes, it isn’t possible to join dodgey tax avoidance/evasion schemes which is probably what is getting people “stressed out”.

    Get real.

    Btw, I’ve been a contractor for 25 years.

  10. Williams October 22, 2022 at 9:41 am #

    This is crazy. We have been left to dry as these umbrella companies continue to feed and suck us dry. I am not happy with our kind of work, I feel we are not recognised. i feel
    Its best to work in a warehouse
    No IR35

  11. Williams October 22, 2022 at 9:47 am #

    Dave- you have no idea what you are talking about. I feel you should try it once and come back on this forum.

    • Dave October 26, 2022 at 10:36 am #

      No I won’t do that, because I believe that the tax I pay contributes to the society that I live in. Call me old fashioned, but social work is about working towards social justice and I’m not going to do that by ‘minimising my tax liabilities’ as I believe it’s known

  12. Alona October 22, 2022 at 10:15 am #

    Work offshore for myself as a limited company employee.
    With the large oil companies sometimes refusing to sometimes hire limited company’s but instead forcing a blanket ban forcing PAYE this is against the rules and spirit of ir35.
    I’ve still to pay for all my own training or can’t get work. I can be told the job is finished due to operational reasons , and even if I’m contracted for a 3 week job, I don’t get paid. How does that make me an employee.

  13. Wally D October 22, 2022 at 3:54 pm #

    Gordon Brown and Dawn Primarolo created IR35 and gave ‘body-shopping’ agencies and accountants a huge increase in income while reducing the income of, and giving an enormous headache to, hard-working contractors. IR35 was a massive sledgehammer to crack a not very big nut. There were a number of better actions that could have solved the perceived problem. Added to that, HMRC inflicted extremely unfair rules on contractors that penalised anyone outside London and big cities. All the while Brown was abusing the politicians’ expenses system and not doing anything to curb the excesses, and rule-breaking, that emerged in the expenses scandal. Also, people in TV are still allowed to make the most of personal, tax-saving companies. Contractors, whether in Social care, IT or other professions must be allowed to profit from their entrepreneurship. These efforts can grow into the bigger businesses that can support the country and make it prosper. IR35 must be removed to give honest, hard-working (and in Social Care, generous) people a decent living. Others have pointed out that contractors pay their own NI (employee and employer), pay for their own sickness time off and double for holiday and training time off (pay for holiday or training and also lose income), spend time out of work if no new contract found, are subject to termination at short notice, etc. The list goes on. Employed people have none of these worries, so equivalence is immoral.

  14. Pauline October 23, 2022 at 9:09 am #

    “Employers remain responsible for ensuring agency workers pay appropriate levels of tax”. Apparently this fascism is driving social workers into penury, anxiety and depression. Anyone interested in creating a Fantasy Social Work League to shine a light into our persecution through tax? I am sure we can devise a points system for hurt feelings, food bank use, mileage allowance, working from home, burden of counting out £90 a year, unpaid overtime, no desking, and the like. Bonus points for supervision in last 18 months. And for BASW membership.

    • Tahin October 26, 2022 at 11:30 am #

      Excellent suggestion. Here we go:

      5 points: “We sacrifice our health and personal life to empower vulnerable people but never get respected for it. But we do it anyway, time after time”. Better put by Millwall supporters “no one likes us but we don’t care”.

      4 points: “Social work is a strength based activity which puts choice, autonomy and self determination at its core”.

      3 points for “Social work celebrates diversity, inclusion and promotes anti-racist activism”.

      2 points: “Remember to upload your CPD and pay your £90. It’s what makes you a social worker”.

      1 point: “I’ve listened to a podcast by people I always agree with, tweeted about a YouTube video by a pal and will always change the opinion I passionately advocated if it doesn’t trend”.

      Zero points for turning up to appointments on time, listening, being pleasant, not feeling permanently persecuted, liking your colleagues, lacking “ambition” to become a manager, not yearning for an MBE, not coveting a “of the year” award and finding joy in the time spent with family and friends.

  15. Simon October 26, 2022 at 10:03 am #

    Curiously those people who justify why they should opt out of PAYE tax never extend their “choice” to opting out of the NHS, paying for their own exclusive police force and expect the local council to light their streets, collect their rubbish, fill in potholes, maintain public gardens, provide play areas, send their precious at least to state primary schools and so on. Some would argue that’s a very good description of selfishness.

  16. Cynthia October 27, 2022 at 9:19 am #

    Tahin I think “we would be better off working in a supermarket” said by people who never seem to get round to leaving social work for that ever so perfect alternative in the 5 points column. Excellent amusement by the way. And accurate. My manager some months ago when I requested some protected time to complete my SWE registration: “if you want to work as a social worker you need to make space to do it. I don’t have the luxury to give time off to the team for this.”

  17. Lou lou October 29, 2022 at 8:44 am #

    Its interesting that BASW are so vocal about this yet silent on the wider issues and concerns in childrens services for staff.


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