Paying both employee and employer NI

[Doctor40]

Hello, I hope someone can make sense of this. I am working as a GP locus, and so am self employed as a sole trader. I work in an NHS region which views me as self employed. I have recently worked in another region which did regard me as self employed, but has now decided all of their locums are to be treated as employed for tax purposes. I think it's something to do with IR35. So they have decided I am an employee for the locus shifts I do, I don't really agree with it, but it would more than likely even out in the end, more or less. However, they have paid me via PAYE and I have paid employee tax and NI but have also been charged employers NI. I spoke to HMRC tonight and they said....they can't charge you both. But I am struggling to understand on what basis they think they can, and how to make them see they can't! Can anyone make sense of it? Thanks

[AmanSood]

The GP can't charge you both employee and employer NI. Employee NI they can withhold from your pay and employer NI they have to pay directly to HMRC by treating you as an employee.

[robbob]

Hello Doctor

Their ""sneaky"terms may be that your "gross" pay/ir35 gross payment amount is calculated as being as "x - y" - with y being an amount that is equivalent to the employers Ni but in reality is simply an adjustment to the gross value calculated and with x being what you thought your gross pay was.

[SteLacca]

Directly from HMRC's guidance:

7. Secondary Class 1 (employers’) NICs

Because the fee payer has a liability to pay secondary Class 1 NICs, they are likely to wish to renegotiate the fee with the intermediary to reduce the rate for the job. They cannot lawfully deduct the secondary NICs from a fee that has been agreed, but could, depending on the contractual terms, negotiate a lower fee.

[Doctor40]

Thanks for the replies. So I do not fall into the IR35 category because I am not a limited company and do not fulfill the criteria. As a locum there is not often a "formal contract" - not great I know but simply an email agreement to work on a certain date for a certain number of sessions or hours for X amount of money.

It seems that the organisation in question - who I worked for several times on a self employed basis for X pounds, had now decided that X pounds is my contractual rate, and they need to deduct tax, and both employers and employees NI from that, and I get what's left. This was not the original agreement, and they have not renegotiated my fee, i.e I have not agreed to a change in fee (which is effectively what's happened since they are now taking several hundred pounds off it to cover their employers NI costs).

Re the comment about secondary class 1 NIC's - I don't work via an agency or intermediary - agreements are made purely between me and the practice I work for. Do you think that the fact that the organisation I have done work for has taken off the employers NIC without my consent would also be worth pursuing?

[robbob]

Re the comment about secondary class 1 NIC's - I don't work via an agency or intermediary - agreements are made purely between me and the practice I work for. Do you think that the fact that the organisation I have done work for has taken off the employers NIC without my consent would also be worth pursuing?

If in doubt i would always seek clarification there should be no element of doubt as to what your taxable pay, tax and ni deducted are - everyone is in agreement here that they cannot deduct ERS ni from your net pay.

[SteLacca]

The problem that you face is that the new off-payroll working in the public sector regulations have spooked the public bodies to such an extent that they are going far beyond the legislative requirements to ensure that they don't fall foul of them.

If you are operating as self-employed rather than incorporated and contracting directly then you are completely outside the scope of the legislation, and you could try to convince them of that in order to maintain your previous relationship and terms.

[Doctor40]

Thanks for the replies - unfortunately the NHS organisation in question are not listening - to any of their locums. I have written to HMRC with my own results of the self employed/employed test which tells me I am self employed. The status changes from employed to self employed in response to a question about supplying my own equipment for my job, the cost of which I cannot reclaim from them - they have said "not relevant" I have said I do, as my kit is many hundreds of pounds so far from "not relevant" IMHO.

I think it's correct that they have got spooked, but rather than just ask for evidence from locums that they are self employed they are applying a blanket policy.

They have taken the employers NI from my gross pay. When I was self employed they paid me £XXXX for a weeks work, now they are telling me they need to meet all their costs from that £xxxx and I get what's left really! End result - no one is going to work for them. So only the patients lose out.