IR35 FOR CARE HOMES – IMPLICATIONS 2021

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IR35 FOR CARE HOMES IMPLICATIONS 2021
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after a false start earlier this year, the new
IR35 UK tax legislation concerning self-employed
workers looks set to take effect from April 2021
having been postponed more than once and this
time due to the Coronavirus pandemic, look at the
implications of IR35 for care homes in
particular. Given the substantial impact of
IR35 for care homes, there is a great deal of
concern throughout the sector about how much this
change will increase the hourly cost of agency
nurses, which could be as high as 30.   The
issue here is serious, since many care homes, and
indeed many social care facilities, rely on
contingency workers to cover staff shortages,
vacancies, temporary cover and increased
demand.   So, what can we do about
it?   Here, the OUTT team has clarified what
IR35 means in practice, what quantifiable impacts
it is likely to have, and how care home managers
can prepare, and keep control of their staffing
budgets.
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WHAT DOES IR35 FOR CARE HOMES MEAN TO STAFFING
BUDGETS?
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he crux of IR35 for care homes in particular, is
that it sets out new rules under which
professional workers can be classified as
self-employed.   Other tests determine when
those same workers must be treated as an employee
regardless of whether they carry out additional
work, or wish to operate as a self-employed
professional.   The number of registered nurses
working via a staffing agency could be as many as
50. What that means, is that many registered
nurses currently working through agencies as
limited company contractors may fall foul of
these new rules, come next April, and be subject
to tax and National Insurance deductions at
source.   Not only does that affect the ability
of an agency nurse to determine how they manage
their shift work, with the flexibility to work
across multiple agencies at the same time, but it
means that payroll costs will soar for care homes.
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• Heres what that looks like
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• A self-employed nurse is employed through an
  agency, and chooses which shifts they accept,
  with full control over their career.
• If they fall into the employment category, the
  care home (i.e. the end employer, not the agency)
  is required to pay them through PAYE payroll,
  applying all the on-costs that entails.
• Care home payroll costs could increase by as much
  as 30 per agency nurse inclusive of holiday
  pay at 12.07, employers National Insurance at
  13.8, pension auto-enrolment at 3, and the
  apprenticeship levy at 0.5.
•  
• While it seems clear that IR35 is intended to
  promote the right of regular casual workers to be
  entitled to all the employment benefits of a
  full-time member of staff, it conversely has a
  significantly negative impact on contingency
  workers who wish to remain so.
•  
• Care home managers now face the challenge of
  navigating increased demand and a higher staff to
  patient ratio, with potentially disastrous budget
  pressure when IR35 comes into force.

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WHICH SOCIAL CARE AND HEALTHCARE FACILITIES ARE
IMPACTED BY IR35?
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• there are rules around which employers are
  required to carry out the IR35 tests.
• Each contingency member of professional staff
  should be assessed, with an immediate switch to
  PAYE payroll if the rules dictated by HMRC
  classify that worker as employed, rather than
  self-employed.
• Exemptions apply as below
• Turnover of less than 10.2 million per annum.
• Balance sheet value of under 5.1 million.
• Fewer than 50 employees.
• Remember that these criteria apply to the end
  client, not the contractor or the agency, so
  these tests to establish eligibility apply to the
  care home or social care employer to whom the
  worker is dispatched.
• The roles that are subject to IR35 assessments
  include registered nurses, and other professional
  roles potentially inclusive of social workers
  and supply teachers depending on how the
  legislation is rolled out.
• Ultimately, IR35 means that, without taking any
  action, care homes will need to find an
  additional 30 budget for agency nurses by next
  April, unless their agency is already billing
  this surplus cost.

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WHAT CAN CARE HOME MANAGERS DO AHEAD OF IR35 TO
PROTECT THEIR STAFFING BUDGETS?
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The first action is to ensure that you are only
employing agency nurses, and any other healthcare
or social care professionals, through a
transparent and compliant staffing
agency.   While umbrella companies and agencies
are familiar throughout healthcare, it is
imperative that you only hire through reputable
agencies and perform routine audits, to avoid
inadvertently breaching the new rules and
potentially being subject to steep
penalties.   OUTT believes that the correct
interpretation of IR35 is that this applies to
all registered nurses working within care homes
regardless of the size of that care home, or
ownership group.   Your next step is to assess
what payroll cost hikes you are facing and to
determine whether reliance on your existing
agency employment structure is likely to be
cost-effective in the future.   And if not? We
have a solution. What if
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• You could hire registered nurses view all of
  their skills, experience and accreditations,
  through a registered agency that charges a fixed
  10 fee?
• There was a fully transparent fee structure, so
  youd always be aware of the cost of hiring
  temporary candidates, without any nasty
  surprises?
• Your agency of choice offered a completely
  digital interface, enabling you to vet
  applicants, make job offers, manage timesheet
  approvals, and request documentation, all from a
  few clicks of the mouse?
• You could work direct with the candidates of your
  choice, eliminating hearsay and third party
  conversations.
• OUTT is proud to be disrupting the framework of
  hiring contingent staff in the social care and
  healthcare sectors.
•  
• It has long been time for a change, and we
  leverage digital technology, and contemporary
  working practices to make the lives of care home
  managers easier, and their budgets simpler to
  control.
•  
• As a service designed in response to the COVID-19
  pandemic, and the urgent need for social care
  managers to have faster, more efficient access to
  qualified shift workers, OUTT is changing how
  agency staff work, for the better.

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How do we work around the IR35 regulations? Its
straightforward
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1. Staff are fully PAYE employed, by us, with the
   same access to benefits, entitlements and pay as
   you would expect in any permanent role.
2. OUTT deals with the payroll, record keeping and
   timesheet approvals through our digital platform
   to save you the time, hassle and cost of doing
   so.
3. We are partially funded by Innovate, and a
   registered and compliant employer thoroughly
   versed with the IR35 legislation, and our
   obligations.
4. OUTT charges agency fees with absolute
   transparency and a fixed 10 cost.

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HOW MUCH COULD I SAVE ON MY CARE HOME AGENCY FEES
FOR TEMPORARY WORKERS?
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When it comes to the crunch, IR35 is about two
things holding employers liable for providing
full entitlements to their workers and collecting
PAYE taxes directly from the source. Even
without the impact of IR35 for care homes, the
sector is often dealing with budget pressures and
staff shortages, and April 2021 looks set to
cause enormous challenges for many
managers. By switching to OUTT, you have the
assurance that your temporary staff are all
employed, with full PAYE benefits, relieving you
of any further obligation aside from
concentrating on running your team. Our
new Temporary Agency Savings Calculator provides
a fast, efficient way to see how much you could
reduce your staffing budget by. As an
indicative example
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• You employ a Registered Nurse through an agency
  at 20 per hour pay rate. Inclusive of your
  agency fees, taxes and additions, your actual
  hourly cost is 30.72 equating to 4.85 per
  hour agency fees, or 21.64 of the staffing
  cost.
• By switching to OUTT, you pay a fixed 10 agency
  rate no quibble, no question. That makes an
  hourly saving of 11.64 meaning you save a
  total of 2.61 for every hour you hire a
  temporary nurse through OUTT.
• Over a year, if you hire registered agency nurses
  for 40 hours per week, for 52 weeks of the year,
  your budget will reduce by a whopping 5,425.89
  without changing anything, but your staffing
  agency.
• You can try out our calculator tool to see for
  yourself how much you could save.
• Sounds too good to be true?
• It isnt.

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For More Information Please Visit on-
https//outt.co.uk For Contact us- 3330151040