Contractors' Questions: What's the NHS's IR35 policy on PSCs?

Contractor’s Question: Are limited company workers who want to work for the NHS still going to be subjected to income tax and NI before being paid into their business account?

Expert’s Answer: The only thing that has changed for the NHS since April 2017 is that they are now approaching the new IR35 public sector rules correctly i.e. not giving blanket assessments depending on the role undertaken.

The detail on the NHS’s current position towards limited company contractors was set out at the end of May by NHS Improvement.

In reality, this revised approach will be of little comfort to most of those working in a NHS hospital. If the worker is providing medical services, then they are highly likely to be inside IR35.

A Consultant in a NHS hospital is considered to be an ‘office-holder’ and should be on the payroll of the hospital. Doctors below the grade of Consultant are all considered to be training grades. The Consultant has the right of control and to intervene, irrespective of whether or not they actually do so.

It follows that the same applies to other medical posts below the grades of Consultants and Doctors. It seems that the NHS will be revisiting each case, using the HMRC Status tool and collecting the evidence to show they have done a proper job assessing but, for medical staff, the results are likely to be the same as before the May revision.  

The expert was Kate Cottrell, co-founder of IR35 status specialists Bauer & Cottrell.