IR35 FAQs

What is IR35?

IR35 is government legislation intended to prevent disguised employment. It is designed to create parity in taxation and national insurance payments, ensuring that anyone who works as an employee pays the same tax and national insurance regardless of whether this is through their own personal services company or they are employed directly.

 

Which roles are affected?

The legislation applies to all roles working in the NHS and medium / large private organisations and may affect anyone who is not being paid via PAYE (or PAYE umbrella).

There’s an exemption for end-clients who are ‘small businesses’ as defined by the Companies Act 2006 which means meeting 2 or more of the following criteria:

  • Annual Turnover is no more than £10.2 million
  • Balance sheet total is no more than £5.1 million
  • No more than 50 employees

 

So, if you are working for an end-client that meets two or more of these criteria, responsibility for determining the IR35 status of an assignment still remains with the PSC (limited company or your accountant) and the new rules do not apply.

 

How do I know if I fall inside or outside IR35?

It is the responsibility of the end client to provide a status determination statement, which confirms whether they deem your role inside or outside IR35. If your status is deemed by the end client to fall inside IR35 your consultant will contact you to discuss further. You can contact your consultant at any time to discuss.

 

How will this affect me?

If you are working in the private sector for a medium or large organisation, and not being paid through a PAYE model you should speak to your consultant to see if the end client has provided a status determination statement for you. Should your role fall within IR35 we can discuss with you what your options in terms of how you are paid.

 

What if I disagree with the determination?

If you disagree with the determination made you can appeal the outcome but should seek further advice on how to do this.

 

Can I still work in the private sector as an agency worker or locum?

Yes you can still continue to work as a locum or agency worker in the private sector.

 

Can I still work in the NHS as an agency worker or locum?

Yes you can still continue to work as a locum or agency worker in the NHS.

 

Do I have to work for an umbrella company?

No, there is no obligation for you to move to an umbrella company. Speak to your consultant to understand your choices and seek advice on the best option for you.

 

What will happen if I don’t comply with IR35?

It is not for you to comply with, if your role is deemed to fall within IR35 the relevant deductions will be made. However, if your role falls outside of IR35 there will be no impact on your payments.

 

Do I need to get a substantive post now?

No, there is still a huge demand for locum and agency workers within both the NHS and private sector, with many benefits of working with AppLocum, including better pay, flexible working patterns and greater work opportunities.

 

Why bother doing agency work if I can’t use my limited company?

Firstly, speak with your consultant to find out if you will be affected, and if so, how. You can then decide the best payment model for you and your consultant will be able to talk you through the many benefits of working with AppLocum regardless of which payment model you opt for.

 

Can I still work for more than one agency?

Yes, you can. Each assignment is viewed independently regardless of which agency you work with and the same rules will apply.

 

Why am I getting different advice from different agencies?

The legislation can be quite difficult to understand and some of the advice published on various websites can be confusing and misleading. For this reason we have given you a library of resources from official sites to ensure you receive correct information.

 

We also have a guide to IR35 and a bank of resources to help you adjust to this change.

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