While medical contractors can no longer put forth their grievances about IR35 proposals directly to HMRC, they still have an opportunity to be heard. Contractors can get in touch with their local MP, according to IPSE Deputy Director of Policy Andy Chamberlain. If NHS contractors and other contractors speak out, it is quite possible that things would change for the better.
If the present IR35 status proposals go through, contractors working on public sector projects and programmes will not have to evaluate their own IR35 status. This will be performed by the end client or agency. If the end client or agency deems that IR35 is applicable, the client will deduct the relevant taxes prior to making payment to the contractors. Therefore, the contractor will not have to worry about contributions to the Employer’s National Insurance. However, contractors will be responsible for Employee’s National Insurance and PAYE.
To avoid attracting penalties and fines, the end client may end up placing all contractors, including medical contractors, under the fold of IR35 regardless of the contractor’s status. Should this happen, it will be difficult for the public sector to attract the right talent, as contractors will be paying taxes like employees without enjoying employee benefits such as sick pay, pension and holiday pay.
The new rules have not been well-received by contractors. Many have claimed that they will cease to work for the public sector should the new IR35 proposals be implemented, and other contractors have stated that they would increase their day rates to compensate for the extra taxes that they would have to pay.
IPSE has met officials during the HMRC consultation and even had a meeting with the Prime Minister, imploring the authorities to abandon the new IR35 proposals. Now, IPSE is requesting that contractors get in touch with their local MP and write down how the new proposals will have a negative impact on their business.