What is IR35?
IR35 or Intermediaries Legislation is the tax and National Insurance legislation that may apply if a worker is working for a client through an intermediary.
How does IR35 effect my Locum work?
Locum GP's may choose to work as a limited company or a sole trader on Lantum.
If you are applying as a limited company you may be subject to IR35 tax at source. You will be able to see if a session is in scope of IR35 on your find a job page shown below.
A Limited Company could be considered to be an intermediary, so if a worker (Locum GP) is working through an intermediary (Limited Company) it is important for both the client (Practice) and intermediary (Locum’s Limited Company) to consider whether the engagement falls under IR35 legislation. The conditions of liability for a Limited Company can be found here.
If you are working through a liable intermediary, it is the intermediary’s responsibility to ensure compliance with IR35 legislation. The intermediary also needs to determine whether IR35 applies for each of the worker’s engagements.
The practice must also consider the worker’s employment status to ensure they fulfil any tax and NI contribution liabilities of their own.
Some of the factors that HMRC will look at when considering whether IR35 is applicable to the engagement are Control, Financial Risk, Substitution, Provision of equipment, Right of dismissal and Employee benefits amongst others.
Locum GPs may choose to work through Limited Companies to make use of certain tax and NI efficiencies, but it is important for both the Locum GP and Practice to consider the IR35 implications and ensure that all potential HMRC liabilities are reported and settled.
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What happens when a job is ‘in scope of IR35’?
If a session is deemed to be in scope of IR35, the practice must indicate this on the session as it is posted. Lantum will process the payment of the IR35 session to the locum, once payment has been received from the practice. IR35 sessions are therefore exempt from Rocketpay.
As the fee payer, Lantum will be responsible for:
- calculating the deemed direct payment to account for employment taxes and National Insurance contributions associated with the contract
- deducting those taxes and employee National Insurance contributions from the payment to a worker’s intermediary
- paying employer National Insurance contributions
- reporting to HMRC through Real Time Information the Income Tax and National Insurance contributions deducted
More information on the changes to IR35 legislation can be found below.
Understand and prepare for changes to the off-payroll working rules (IR35) if you are a client receiving services from a worker through their intermediary.
Understand and prepare for changes to the off-payroll working rules (IR35) if you're a contractor or an intermediary and your worker provides services to a client.
Find out how to prepare for changes to the off-payroll working rules if you engage contractors working through their own limited company.
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