No sector wide assessment has been made of the effects of the 2019 Loan Charge and IR35 reforms on the National Health Service. While there was some anecdotal evidence of locum staff shortages when the changes were first implemented, recent HM Revenue and Customs research has identified that 58% of central public bodies have not experienced problems with filling off-payroll worker vacancies and 63% have not experienced an increase in contractor rates payable as a result of the new legislation. There is no reason to suggest that these figures are significantly different for NHS bodies.
No estimate of the number of locum doctors affected by the 2019 Loan Charge has been made. It is the Department’s expectation however that locum doctors do not enter into tax avoidance arrangements and should comply with this new legislation from its introduction in April 2019.
No estimate of the number of NHS trusts that rely on blanket IR35 assessments of non-payroll NHS staff has been made. However, as per the changes to the Income Taxes (Earnings and Pensions Act) 2003 outlined in the 2017 Finance bill, decisions as to whether or not contractors fall inside or outside of the IR35 rules should be made on an individual basis. Recent HM Revenue and Customs research has indicated that 91% of public bodies are making these decisions on an individual basis and we would expect all NHS bodies to be compliant with this legislation and not applying a blanket decision on IR35 to all their contractors.
Trusts have been advised to take their own independent advice on how they should determine whether a role and/or worker falls inside or outside IR35. We do not recognise that trusts are operating blanket decisions. While advice supplied by HM Revenue and Customs indicates that a role can be assessed as long as the contractual terms remain the same without the need for assessment on each occasion a worker changes this is not to be confused with a blanker decision - it is a balanced and reviewed decision on the role.