If your care home works with independent contractors, you should be aware of upcoming IR35 legislation.
Here, we’ll explain what IR35 means, and how it may affect you once the new rules are put in place April 6th, 2021.
This means you can be sure you’re following IR35 law when working with us.
Watch: IR35 explainer for care homes
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Or, scroll down to find answers to your most frequently asked questions
What is IR35?
IR35 is legislation that categorises independent contractors for tax. Nurses and carers you book through an agency to fill shifts are contractors.
Within IR3 law, contractors are defined as either ‘inside IR35’ (meaning, paying the same tax and National Insurance as permanent workers), or ‘outside IR35’ - ie, self employed.
What is changing with IR35?
It used to be your contractors’ responsibility to determine their status (either ‘inside’ or ‘outside’ IR35), and pay taxes accordingly.
Now, if you’re a large, privately-run care home, it will be your responsibility to determine the status of contractors.
Your care home could now be responsible for this from April 2021, depending on a set of factors (explained in the section below).
Note - if you work with Florence, you can be assured you'll stay compliant with IR35 law. But if you work with other suppliers of contractors, it's important to know if you'll be affected by IR35 changes.
Will I be affected?
Yes: large and medium-sized care homes
Large and medium-sized private care homes are affected by the change in the rules.
HMRC defines a large or medium-sized private company as meeting two of the following criteria:
- you have an annual turnover of more than £10.2 million
- you have a balance sheet total* of more than £5.1 million
- you have more than 50 employees
*Balance sheet total means the total amounts shown as assets in the company’s balance sheet before deducting any liabilities.
If your home or group meets two of the above criteria, the rule change applies to you.
This means you will be responsible for deciding the IR35 status of the independent contractors you can work with, such as nurses and carers employed to fill shift vacancies.
No: small care homes
If your care home doesn’t meet two of the above criteria, the change in IR35 law will not apply to you.
This means there should be no changes to how you currently operate, it will remain the responsibility of your contractors to determine their IR35 status, and pay taxes accordingly.
The rules could change for small homes in future tax years, however.
If you are a smaller home working with Florence, you’ll be future-proofed for compliance with any IR35 changes, as all staff booked with Florence will be paid via PAYE.
When will the new rules be in place?
IR35 rules for the private sector will come in place on April 6th, 2021, at the beginning of the new financial year.
What’s the risk of ignoring the new rules?
You’re liable to pay back taxes if HMRC sees you have not been paying the appropriate tax and National Insurance contributions on workers they deem to be ‘inside IR35’.
It’s important to examine your current setup, and make any adjustments needed to fit with the new law.
How can your care home be ready?
It’s time to prepare for the changes to the law in April.
What happens if I already work with Florence?
You can relax - all staff you book with us from April 6th onwards will only be paid via PAYE.
This means you can be 100% sure you’re working within IR35 law when booking nurses and carers with us, whether you’re a small or large care home.
You don’t need to do anything differently. Simply continue to book staff as normal after April 6th.
How can Florence help you get IR35-ready?
If you’re not already working with Florence, and you’re unsure how to navigate IR35, we can help.
You can enjoy 100% certainty you’re in line with IR35 law when working with us, because once the law changes, we’ll only pay staff via PAYE - a guarantee your current agencies may not be able to make.
We’re also able to offer greater transparency, speed and simplicity than traditional agencies - see more about how we compare here: Nursing Agencies vs Florence - 5 Differences You Probably Didn’t Know
As well IR35 compliance, Florence offers you quality nurses and carers to help fill your shift vacancies.
Florence nurses are:
- Accountable: Florence’s rating system keeps nurses motivated and professional by rewarding great performance with high ratings, viewable to you when hiring.
- Experienced: Nurses must undergo mandatory training and have at least a years’ experience before joining.
- Safe: Nurses undergo extensive background checks, including enhanced DBS, right-to-work and references from senior managers.
Use Florence to find, engage and pay nurses with one simple website platform, on desktop or your phone. We deliver the best-matched staff for your shifts, without the fuss.
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The information provided on this web site is of a general nature. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from a professional accountant before you take any action or refrain from action.
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The information can only provide an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice.