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.
You can edit your preferences by clicking on My Account.
What happens when a job is ‘in scope of IR35’?
HMRC have said that the payment agent (Lantum) must deduct taxes at source if the work is in scope of IR35. Lantum will deduct taxes (being Income Tax and Employee’s National Insurance) at source in accordance to the locum’s tax code. The Finance team at Lantum put the information through our payroll software and send a payslip to the doctor along with their net pay. Note these jobs cannot be on Rocketpay as we do payroll once every 2 weeks.
More information about IR35 can be found on the Government's website here.
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