Due to the confusion brought upon the tax system by recent events, things have been rather uncertain. It had been suggested that IR35 legislation was being repealed and this would be actioned as it was due to go before Parliament shortly.
However, changes to this were scrapped and IR35 remains in force. There are a number of simple ways not to be caught out by IR35, especially if you are a locum, but you need to be smart and thorough. Sadly, too many people leave themselves vulnerable by ignoring out advice, or worse, by pretending they don’t understand what we tell them. It’s up to you. It’s also simples!!!!!
To cut to the chase, just saying you are a locum is not enough – your actions or lack of action define the position quite clearly. If you work a regular shift or day for someone or a rota of regular days
e.g. Mondays at Boots store #1, Saturdays at Tesco store #999 on a continuing and regular basis, HMRC define this as a series of regular employments, NOT locum work. If you claim locum status for such work, you are likely to be reclassified as an employee in each case and you and the employer are liable to pay PAYE and NIC, which can be charged over a period of years back, resulting in both parties having potentially large tax and National Insurance liabilities to repay.
This can be mitigated by setting up as a limited company*, which requires professional accounting advice, but does come at a cost and still the details in the previous paragraph may well invalidate the status as the actions remain the same.
As we are consultants, rather than an agency, we can be more free in managing bookings to avoid the problems that can occur, as long as you work together with us to protect yourself. Shouldn’t you want to work with people who can be trusted? It is also important to understand that being a “true” locum, you may substitute a suitably qualified person to fulfil an obligation (subject to the client’s agreement, and this would normally require payment and other conditions to be the same as you initially accepted.
To avoid difficulties, you should not sign up to regular shifts on a long term basis but mix and match your work diary with different placements for different establishments. We can help manage bookings to protect you from this, despite some companies pretending they don’t understand it and ultimately they ask you to come on their books as an employee, which is probably where you should have been in the first place if that is the case.
We can make it easy or you can make it hard. it’s up to you. It can be very, very painful financially and HMRC are quite ruthless. Most people fail to understand that the job of HMRC is to collect taxes for the Exchequer on behalf of the UK government, NOT to be reasonable.
We can help people set up as limited company through our accountants, who have wide experience of this and can advise how to do things properly and at very reasonable cost, but let’s repeat, if you don’t follow the guidance we offer, expect to get bitten. (We do not make or take any commission for referring people).
We will monitor the situation and if things change, will update this post, so please keep checking back