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What does IR35 mean for Florence nurses and carers?

Many of our nurses have been in touch with us recently to ask about the upcoming changes to the IR35 legislation and how they will affect the way they work.

What is IR35?

Any contractor is categorised by HMRC as either ‘employed’ or ‘self-employed’ for tax purposes. This status is determined by various factors such as the nature of their work or the degree of control they have over what work they do and how they do it. For more information on how the status is determined, please see the government’s guide. This means it is not always the case that if you work through a PSC you are seen by HMRC as ‘self employed’ for tax and National Insurance purposes.

IR35 is an attempt by the government to crack down on the avoidance of employment tax by contractors who are working through PSCs but in reality are working in exactly the same way as someone who is an employee at the same workplace. These contractors might be paying tax and national insurance as if they are ‘self-employed’ when really they should be paying as if they are ‘employed’.

We advise all nurses and carers to read the government’s guide carefully and seek advice from professional accountants to determine their own employment status correctly for the work they do with Florence.

What is changing?

In 2017, for the public sector, the responsibility for determining tax status shifted from the individual to the organisation employing that individual. In practice, this meant that most public sector organisations determined that the majority of their agency workers (most nurses, for example) fell ‘inside IR35’. This means they should be treated as ‘employed’ for tax.

From April 2020, the same rules will also apply in the private sector, but only for companies deemed to be large or medium sized. Large or medium sized applies to businesses with more than 50 employees and more than £10.2M of revenue; this means most homes which are part of a large group will fall into this category.

What does this mean for people booking shifts through Florence?

If you are working in a large or medium sized company

From April 2020, it will be the responsibility of the end user (e.g. the care home) to determine your employment tax status if they are part of a large or medium sized company.

The care home will need then notify Florence, and we will ensure you are paid accordingly.

If you are working as a PSC

If you are working through a PSC but the care home determines that you are employed for tax, you will need to pay your own tax and National Insurance out of your received pay as if you are a PAYE worker.

If you are working through a PSC and the care home determines you are self-employed for tax, Florence will pay you as normal but we will need to report any payments we make to you to HMRC.

If you are working as a PAYE worker

If you are working as a PAYE worker with Florence, you will continue to be paid as normal and we will take care of everything.

If you are working in a small home

From April 2020, the responsibility for determining the tax status will still remain with the individual workers.

If you are working through a PSC

If you and your accountant have determined that you are self-employed for tax, we will pay you as normal but we will need to report any payments we make to you to HMRC.

If you and your accountant determine you should be employed for tax, you will need to be paid net of some deductions (e.g. for insurance) and you will have to pay tax as if you are a PAYE worker. In this case, we recommend you register as a Florence PAYE worker.

If you are working as a PAYE worker

If you are working as a PAYE worker with Florence, you will continue to be paid as normal and we will take care of everything.

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