From a very recent letter to all NHS Trusts regarding Locum and Agency spending
Given who this letter came from the above can probably be taken as gospel for the foreseeable future....
Personal Service Companies
There is still far too much use of Personal Service Companies (PSCs) to avoid tax. New HMRC rules coming into effect in April will have a material impact on this. HMRC will treat all public sector ‘self-employed’ contractors using a PSC as falling under IR35 and therefore treated for tax purposes as an employee. As a result of these new rules, we anticipate that providers will need to ensure all locum, agency and bank staff are subject to PAYE and on payroll from 1 April 2017. We realise that this will have substantial administrative implications for providers, and more guidance on this will follow soon.
There is still far too much use of Personal Service Companies (PSCs) to avoid tax. New HMRC rules coming into effect in April will have a material impact on this. HMRC will treat all public sector ‘self-employed’ contractors using a PSC as falling under IR35 and therefore treated for tax purposes as an employee. As a result of these new rules, we anticipate that providers will need to ensure all locum, agency and bank staff are subject to PAYE and on payroll from 1 April 2017. We realise that this will have substantial administrative implications for providers, and more guidance on this will follow soon.
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