HMRC Misleading The NHS

Oh dear it seems that HMRC is misleading (deliberately? Surely not!) the NHS wrt IR35 contractor rules.

Tax experts and lawyers have called into question HMRC’s grasp of the laws surrounding IR35 and expressed fear that HMRC has misled the public sector on implementing the Off-Payroll legislation, following the exposure of a controversial webinar delivered to the NHS.

‘Working through intermediaries: implementing IR35 guidance in the NHS’ was delivered by HMRC’s policy advisor on IR35, Mark Frampton, to NHS Improvement in September 2017.

Leaked to ContractorCalculator by the Independent Health Professionals Association (IHPA), the hour-long webinar may help explain the reportedly huge number of blanket inside IR35 assessments since the Off-Payroll tax took effect, with experts slamming HMRC’s guidance as ‘misleading’ and ‘inaccurate’.

Martyn Valentine, director of employment status specialists The Law Place. is quoted by ContractorCalculator:

“Frampton’s comments on employment status case law is a matter of concern.

The guidance issued to Trustees appears geared toward finding almost all NHS locums within scope of IR35."

IHPA secretary-general, Dr Iain Campbell said:

"The consequence of this guidance to NHS Trusts has already resulted in a reduction in locums prepared to work in hospitals, leading to rota gaps not being filled, and a worsening of the winter crisis and endangering patient care.”

Stephen Mhiribidi, head of legal at the IHPA, added his voice to the discussion:

“Many locums are much slower to take shifts that entail significant travel, subsistence and accommodation costs, and rota gaps are increasing on a daily basis. Indeed, some trusts have found themselves in the red on the risk register as a direct consequence of this."

Speaking during the webinar, Frampton commented:

“If you look at the terms and conditions, and the way that an individual works, and they work in broadly the same way as an employee, then they should be taxed broadly in the same way as employees.”

Except that is wrong!

Valentine said:

“Frampton is wrong here, and this is a dangerous statement, both for locums and the NHS itself.

The legislation actually requires that IR35 be assessed on a case-by-case basis, with multiple factors outside of the contractual terms taken into account.” 

The result of this misleading advice will be that genuine contractors will stop working for the NHS.

Tax does have to be taxing.

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