On 6 April 2017 new rules came into play which meant that “public bodies” – and for the purpose of these rules, GP practices are classed as a public body – now have to decide whether off-payroll workers should be subject to the deduction of tax and national insurance contributions through the practice payroll. If this is the case, then employer’s national insurance contributions of 13.8% are also due.
In addition, penalties may be imposed if the rules are not followed. It is therefore very important to ensure the rules are followed correctly.
In order to decide whether the rules apply, HM Revenue & Customs have advised that where a practice can demonstrate that it has used the online decision making tool found at https://www.tax.service.gov.uk/check-employment-status-for-tax/setup, then they will accept the decision, as long as the answers are not “contrived” in order to obtain the “correct” answer.
These rules have now been in place for 12 months, and in our experience Locum GPs rarely fall within the rules. However it is important that practices do not become complacent over the rules and continue to check the position on a regular basis for all locums, whether it is the first time they have covered a session or not. Each case depends on the precise arrangement between the locum and the practice. Equally, the position may change and a locum who is assessed as outside of the rules on day 1 may have a changed status by day 366.
If the online tool is used, it is best practice to print out the decision and retain it with your payroll records.
If you have any doubt as to the status of your locums, or other off-payroll workers, please contact us so we can advise you as to the tax and commercial consequences of the appointment. Email me Victoria Bishop on E: firstname.lastname@example.org or ring me: 0191 2818191