Nobody likes to talk about tax, but when it comes to IR35, it’s especially important if you're a locum candidate or an executive professional working on an interim basis.

IR35 is tax legislation. It’s designed to prevent tax avoidance by working as a self-employed contractor through an intermediary (such as a limited company). It was introduced to tackle the problem of 'disguised employment', where organisations hire workers on a self-employed basis instead of on an employment contract, but in reality, they're disguised employees.

On 6 April 2017, there was an important amendment to the IR35 rules for individuals providing services to the public sector through an intermediary. Prior to that date, it was the intermediary’s decision whether IR35 applied to the working arrangement, but these new rules transferred this responsibility from the intermediary to the public sector receiving the service.

Who decides if a role is inside or outside IR35?

If the role is with a private sector client (out of scope) then the worker still decides.

But if the role is with a public sector client, the public sector body (i.e. local authority or NHS Trust) receiving the service decides whether IR35 applies to your working arrangement by following a set of guidelines on a case-by-case basis. The decision does not belong with Sanctuary Personnel.

To summarise, IR35 applies if you are providing services to a client under circumstances that, if not for the involvement of the intermediary, would be viewed as employment. The length of contract is irrelevant.

To make things clear, all of our job listings are marked as either inside or outside of IR35. If you're on a contract for services and you're determined to be outside of IR35, that means you can claim tax relief for expenses and other items.

What action should I take?

If a role is within IR35, the relevant tax and National Insurance are withheld from payment to the intermediary and paid over to HMRC on their behalf. For Sanctuary candidates this means you’ll either be paid through Sanctuary Personnel as PAYE, through a compliant PAYE Umbrella company or via Deemed Payments.

If your role is Outside IR35 or Out of Scope for the off-payroll rules, we recommend that you speak to your accountant for advice on the options available to you.

For more information on IR35, contact your Sanctuary consultant.