The Independent Health Professionals Association (IHPA), the voice for locum and independent health professionals have launched action against the NHS over their implementation of the IR35 reform.
The association which represents a large portion of locums in the UK has taken a stance against the way the NHS has been assessing locum workers to see if they’re outside IR35, or caught under IR35.
They have launched two legal campaigns, for which they are fundraising £45,000 to operate. The crowdfunding page titled ‘unfair IR35 blanketing’ has raised just less than £5000, but the IHPA have announced that the action will go ahead regardless of whether the target is met.
They have run tests on several NHS trusts to gather evidence on how locums are being treated in relation to IR35.
The IHPA has said, “the vast majority of locum workers in the NHS are deemed to be inside IR35, irrespective of the circumstances of their contract. NHS bodies are simply ignoring guidance that has been issued by NHS Improvement.”
The NHS has been accused to have been using a blanket approach towards determining IR35 status.
“This blanket imposition resulted in a loss of earnings to locum doctors, nurses and allied health professional of about 30% – 50%.
“We are taxed in the same way as our permanent colleagues without the benefits, including pension rights and sick pay, and without the ability to offset many thousands of pounds in liabilities that we incur, whereas permanent colleagues do not, in relation to travel, subsistence, accommodation, indemnity insurance, etc.”
A similar campaign was previously led by Mike Gibson, over the way IR35 status is determined.
What is the Public Sector IR35 Reform?
The public sector IR35 reform came into effect on April 6, 2017, as confirmed in the 2016 Autumn Budget Statement.
It is intended to prevent what is known as ‘disguised employment’, where an individual that would otherwise be an employee is engaged via a limited company (an intermediary) and receives the tax benefits normally associated with this structure.
The proposed changes put the determination of IR35 status into the hands of the Public-Sector Body, rather than the hands of the contractor, as it was previously. In addition to moving status determination to the hands of the engager, the 5% allowance was also removed.
The Autumn Budget 2017 will take place on 22nd November, when Philip Hammond, Chancellor of the Exchequer will announce his financial plans for the coming year.
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