The British Association of Social Workers is keen to seek to the views of members whose independent practice is contracted wholly or in part through an agency. This is in direct response to the IR35: intermediary legislation reform that is to be introduced in April 2017 and will affect many locum working arrangements. Further to this, there are an increasing number of regional pay caps being introduced on agency staff contracts which may affect locum incomes.  

What is the IR35: intermediary legislation? 

The IR35 or intermediaries legislation is applied by HM Revenue & Customs to self-employed contractors that are classed as working within a 'disguised employees' arrangement. This is particularly relevant to Independents who have a single public sector client including locum/ agency social workers. Implications of the IR35 include Independents being subject to similar taxation to those colleagues in pay-as-you-earn (PAYE) tax employment including National Insurance contributions. These taxes can be applied retrospectively imposing significant tax bills to independent social workers.

What are the changes?

Whilst the IR35 Tax Regulations have been around for several years, the government is committed to reforming the rules to take effect from April 2017 to include:

  • The responsibility of declaring an IR35 arrangement will move from the Independent to the contractor. However, as a small business owner, Independents are still legally liable for ensuring they pay the appropriate taxes.
  • The contractor closest to the Independent will account for income tax and national insurance contributions. This will be the employment agency should the Independent work via these services. 

Find out more on the government website
Find out more on the BASW website

What is pay capping

Some local authorities in England have agreed to regional memorandums of co-operation that impose caps to social work locum pay. First introduced in 2016, these pay capping arrangements were in response to the increasing competition of locum recruitment and more importantly retention of existing locums. 

* 1. Please specify if any of your independent practice is contracted through an agency: (please select the most accurate statement)

* 2. Were you aware of the IR35: intermediaries legislation and the reformed rules to be introduced from April 2017? (please select the most accurate statement)

* 3. Have you been affected by the IR35: intermediary legislation?

* 4. Increasingly, BASW Independents who work as locums may find themselves either being directly employed by a local authority/ service provider or by an umbrella company. Please specify your views on these potential arrangements: (select all that apply)

  Strongly support Support Neither support not oppose Oppose Strongly oppose
Employed by an umbrella company
Employed directly by a local authority/ service provider

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