The British Medical Association has applauded the decision of NHS Improvement to undertake a U-turn on IR35 tax advice.
This would have penalised locum doctors and increased costs, with the BMA deeming the previous policy to be “disastrous”.
NHS Improvement has now asked five practices to carry out a case-by-case assessment of whether IR35 applies when employing locums.
The BMA has already endorsed this decision explicitly.
IR35 is intended to prevent ‘disguised employment’; effectively a form of tax avoidance.
In disguise employment, a worker receives payments through an intermediary in order to make tax savings.
It was historically possible for locum doctors to decide whether or not IR35 rules applied to them.
But a rule change in April instead puts the onus on the practices that employ these temporary professionals.
The British Medical Association had been hugely critical of the new move, and chair of the General Practitioners Committee’s sessional committee, Dr Zoe Norris, stated in a blog article that the new procedure caused a huge amount of confusion.
But this has now been reversed after widespread criticism.
The National Association of Sessional GPs had previously warned that locums would be forced to conduct additional negotiations for every single contract that they work on due to the new regulations.
It is also suggested that as this process would deduct tax from the earnings of locums rather than earnings themselves, larger deductions would result, effectively reducing the pay of local doctors.
But with this policy now reversed, NHS Improvement advises practices to decide whether IR35 rules apply on a case-by-case basis.
Commenting on the issue, a spokesman on behalf of of the BMA suggested that the influence of the British Medical Association had directly impacted on the decision.
“This is a significant and positive step forward in response to BMA pressure following the chaotic introduction of the IR35 rules. This change significantly penalised locums in general practice and in hospitals. It was administratively a disaster for the NHS.”
The spokesman went on to welcome the reversal of the previous guidance.
“We are pleased that NHS Improvement has finally listened to grassroots GPs, hospital doctors and the BMA by dropping its unworkable blanket approach to this policy. The NHS should now do more to show that it values the essential role locum doctors play in ensuring patients get good care on a daily basis.”