HMRC has finally unveiled the online tool that assesses the IR35 status of contractors working through their Personal Service Company on government contracts. The Employment Status Service (ESS) tool was released late on 2nd March 2017 and is designed to help contractors, and the public sector organisations and agencies who hire them determine whether or not the worker is inside or outside IR35. Early trials have led to much criticism on contractor forums with many stating that they have found the tool inconclusive and therefore not fit for purpose.
The launch of the ESS tool comes not long before HMRC’s IR35 reforms become effective, on 6 April 2017. These changes will for the first time see public sector authorities such as NHS Trusts taking responsibility for deciding the contractor’s IR35 status. Currently the contractor considers the contractual arrangement in force and how the services are actually being delivered to reach a decision on whether or not they are inside IR35.
The introduction of the ESS tool was supposed to bring more clarity to the situation of how public sector contractors, such as locums, should be taxed from April. However, a survey carried out by ContractorCalculator suggests that some of the results being returned from the online tool are at odds with the UK’s employment laws. ContractingWISE’s Jon Millar says that this ‘makes the tool unfit for purpose, as it is failing to provide clarity or reassurance to contractors concerned about how their tax status may change once the IR35 changes are applied.’
‘There is only a few weeks before the IR35 reforms come into place and from some of the results this tool has provided so far, there is a concern that HMRC could be giving employment status decisions to contractors, agencies and public sector organisations that are misleading,’ he said.
We know that this is an uncertain time for many contractors and we are here to help. We are urging any government workers to seek professional advice. As independent advisers working with a range of contractor solution providers, ContractingWISE can offer contractors confused about their options, expert guidance and assistance.
In our efforts to reach out and assist all contractors, we will be speaking at 2 upcoming Locum Today events, which are aimed at locum social workers and social work professionals considering the locum route. The events will provide attendees with the opportunity to hear key note speakers in the social work field, ask questions to a panel of experts and network with fellow locum social work professionals at a drinks reception.
It is a critical time for locums and ContractingWISE are pleased to be the keynote speaker at this event. We will be updating attendees on the new changes happening in April and what they mean in practice. Attendees will also have the opportunity to ask our representative questions, along with other experts in the locum field on this very issue. For more information and to purchase tickets, please click here