Contract Agency Nurses: Government postpones IR35 reform until April 2021
23 March, 2020
Last week the Government announced that the IR35 reform, due to commence in April 2020, will be delayed until 2021. The implementation of the new legislation will mean that private sector businesses will join the public sector in taking responsibility for the tax status of their contract staff.
On 17th March, Chief Secretary to the Treasury, Steve Barclay MP to the House of Commons, stated that the government will be postponing the tax reform for 12 months, in response to the effects that COVID-19 is expected to have on the UK economy.
What does this IR35 announcement mean for nurses?
This delay comes as good news to the agency nurse and contractor market, as the UK economy prepares for a period of turbulence. The uncertainty created by the COVID-19 virus has hit the contract market particularly hard, with the proposed reform meaning that in the future, contract nurses and agency nurses might risk losing work and the right to sickness pay - so the delay could not have come at a better time. Campaigners continue to propose a review of the IR35 legislation, suggesting the Government develop a different way contract workers to be recognised by the tax system.
The healthcare industry has faced issues as a result of IR35 tax rules, in particular staff shortages and an increase in healthcare contractors falling prey to tax avoidance schemes. We are not tax or legal specialists so recommend exploring all your options and consulting an accountant.
If you are looking for a new role or feel unsure about IR35, get in touch with a Direct Healthcare consultant today.