IR35 brings a huge change for Social Work recruitment

In April, changes to the IR35 legislation will impose a huge change on the public sector interim market. For those caught by the legislation, workers through their own limited companies will be subject to withholding of tax and NIC on payments received, with the payer also incurring employer’s NIC and Apprenticeship Levy costs on top the payments. The Qualified Social Work market is likely to be one of the most affected with almost all of the current locum workforce deemed in scope of the legislation.

 

So what does this mean for the sector, its employees and its employers? Here are my thoughts on the possible outcomes if we don’t approach the legislation head on:

 

  • There will be tension between council recruiters wanting to keep low rates and highly skilled workers, and those workers wanting to keep the same take home pay after the new rules come in as they do now.
  • Agency workers leave the sector, resulting in further skill gaps in high demand and vulnerable areas. Will they move sectors to get the same rates?
  • Agency workers are unaware of the legislation and do not take suitable, timely advice from their accountants, leading to panic at the potential loss of earnings imposed.
  • Agency workers operating under their own company look to schemes that maintain their current employment and earnings status. Such schemes will be ill advised and often outside the legislation, leading to problems further down the line and potentially affecting the whole supply chain.

 

All of the above results in a disruption to (in some cases) an already fragile service. A level-headed and knowledgeable approach is required now to help all parties understand the legislation and work in collaboration to ensure Social Work service delivery is not compromised. There are many possible solutions and it is important to engage in discussions now. One certainty is that HMRC will hold all parties accountable to the new legislation.

 

Badenoch & Clark is fully briefed on all the changes and is in the best position to advise all parties on the potential impact and suitable outcomes of the legislation. Please contact the Social Work team to advise and support you through the changes.

By Jonathan Rayfield, Associate Director - Local Government & Social Care

 


Categories

Public Sector , Recruitment
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