Independent health workers and IR35 – So far

IR35, health workers and current state of things


Prior to April 2017 independent healthcare ‘locum’ contractors from all healthcare disciplines were disparate groups with no centralised voice.  This absence of representation on the national stage has facilitated repeated attacks on their income and working conditions in recent years – allowing cartel behaviour of rate fixing between NHS bodies to be rolled out without effective opposition and setting the stage to convince politicians that, this group could be bullied and manipulated into accepting unlawful blanketing under off-payroll tax rules (IR35), regardless of the clear reality that, for many locums, they should be outside the legislation due to a lack of control, mutuality of obligations, and because of the financial risks they bear – which can amount to tens of thousands of pounds.

April 2017 and the change to the Intermediaries Legislation:

The events we are about to cover are the assault that was the last straw for contractors and was the crucible which caused locums to come together to forge first the Locum Doctors Union and ultimately to expand to embrace all disciplines of healthcare contractor under the Independent Health Professionals Association….

In April 2017 a very minor alteration was made to the part of the UK’s tax legislation governing working through intermediaries, commonly referred to as IR35 – essentially only two changes were made:

  1. The responsibility for undertaking assessments and liability for back taxes was switched to the Fee Payer (Note that sometimes this is the public body but the responsibility rests, in fact, with whoever makes the final payment to the contractor’s company and this may be an Agency, Umbrella or Payroll company).
  2. For those found to be under IR35 in the public sector, previous rules allowing a 5% expenses allowance were scrapped.

Notably the rules for determining status have not changed and if you were outside IR35 legally beforehand you still are now….or at least if you got a fair assessment you would be.

….So, why did everything change in April 2017 despite the fact that the legal change should not have changed the outcome of a single assessment?

Sadly, there has been a simultaneous push by public bodies such as HMRC and NHSI to ignore the law of the land and manipulate public bodies into finding contractors caught by the IR35 legislation. Initially this was implemented by blanket banning of contractors working outside IR35. This was very clearly unlawful, and our organisation successfully challenged through the Judicial Review process – NHSI conceded it had been acting unlawfully by advocating blanketing settling out of court and issuing this updated guidance.

This clear indicator has been deliberately ignored by the calculator – as has been confirmed directly by HMRC’s chief policy advisor on IR35 Mark Frampton in a secret webinar held with Trusts and NHSI to coordinate de facto clandestine blanketing

Most public bodies were not equipped to handle the assessments properly and HMRC’s answer to this has been a tool (initially called the ES tool now called CEST) which does not align with the case law. The tool appears to be rigged and ignores key tests – such as mutuality of obligation something most locums would pass and achieve an outside IR35 result as there is no requirement on them to accept shifts nor upon the hospital to offer them. Many members have examples of contracts being terminated during a shift or within several hours of the start date. This clear indicator has been deliberately ignored by the calculator – as has been confirmed directly by HMRC’s chief policy advisor on IR35 Mark Frampton in a secret webinar held with Trusts and NHSI to coordinate de facto clandestine blanketing – above board blanketing having failed.

Additionally, the courts have consistently ruled that ‘Mechanistic Approaches’ such as the CEST tool are not an acceptable method of IR35 status determination.

This de facto blanketing by institutionalised misrepresentation of answers to the CEST tool and ignoring the legal tests has been an abuse of the duty of determination entrusted to Public Bodies following the changes.

IR35 change provokes staffing exodus and crisis

“Not only the reforms themselves but HMRC’s encouragement of malpractice within the sector is driving away the essential skills that the NHS depends on,”

The fall out has been an exodus of contractors from the public sector across many sectors leading to delays in completion of public service contracts. The chronically understaffed NHS, even admitted by the Secretary of State for Health, has also been affected with less locum and agency workers willing to take extra shifts. A survey of 450 healthcare locums by ContractorCalculator showed that a quarter had left the NHS, 72% were considering changing careers and 87% said the reforms are already drastically impeding patient care. This does not bode well for our beloved National Health Service.

Dave Chaplin, ContractorCalculator CEO notes that “Not only the reforms themselves but HMRC’s encouragement of malpractice within the sector is driving away the essential skills that the NHS depends on,”.


It appears that there will be no resolution to this injustice without further legal action bearing in mind that this was one of the steps we had to take to reverse the "inaccurate" (read as unlawful) decision by NHSI to apply a blanket decision to place all locum workers inside IR35.

The lack of consideration of Mutuality Of Obligation by the CEST tool is one such judicial review challenge that would go a long way to resolving this for all public sector contractors, not just those in the health sector.

Help correct this unlawfulness!

We are crowdfunding a Judicial Review on the incorrect implementation and application of IR35 for healthcare workers

IR35 Seminar and CPD event

IHPA - LDU MK meeting

The LDU looks forward to welcoming you to its Locum Doctors Conference to be held at Double Tree Hilton, MK Dons Stadium in Milton Keynes, MK1 1ST, on Saturday 18th November from 9.30am - 3.30pm.


09.30 am Registration and refreshments
10.00 am The President’s Address - Dr Ben Itsuokor
10.10 am IR35 update - Alex Peebles, Legal Counsel
10.50 am Management Training - Teamwork, Development and Problem Solving Part 1
12.20 pm Luncheon and networking
1.30 pm Teamwork, Development and Problem Solving Part 2
3.00 pm Wrap up and fairwells - Dr Ioannis Baraboutis


ID Medical is bringing us a hugely discounted CPD accredited management course which will provide you with certification on the day for 4 CPD points to add to your revalidation portfolio. Retailing at £199 we are given this at cost price of £50 inc VAT.

The CPD accredited course is part of the LDU conference and costs £50 inc VAT. The cost for non-members is £200 (the cost of membership) + £50 (event fee).



IHPA and new legal team reiterate mission

A new and powerful legal team

A new and a powerful legal team is being set up. This is due to new evidence that has come to us and are still coming in. This team will issue PAPLs to the trust within two weeks and a JR will follow. At our third general meeting on the 18/11/2017, Stephen and I will update you on the new strategies. I would advise you to attend the event. It’s best you don’t take any weekend shift on that day. There will also be an educational event with associated CPD points. We stand for you and by you.

Mission statement

The Locum Doctors’ Union (LDU) is an unincorporated association with the mission of supporting locum doctors to secure their rights by negotiation, mediation and litigation, as required. It does this by providing advice, assistance and a network for sharing relevant information and continued professional development. From an NHS Trust’s perspective, the LDU and HPU aims to facilitate a collaborative culture, to bring together the shared objective of ensuring the delivery of first-class patient care.

The benefits of membership

  1. Provide discounted CPD points
  2. Members will get discounted appraiser rates
  3. Medicolegal protection coming in the form of medic HR
  4. Indemnification of members at a rate cheaper than competitors
  5. Protecting members from unfair dismissal and claiming compensation for them
  6. Helping members to do audit using external audit companies
  7. Helping members who are being bullied in their trust
  8. Protecting against future HMRC investigation
  9. Help with MJR

The Healthcare Professionals Union (HPU) was formed on 11 May 2017. Its mission is to support nurses and allied health professionals throughout the United Kingdom by providing pastoral, legal and HR support networks.

LDU and IHPA main aims are:

(i) act to either injunct, halt or achieve an equitable resolution with regards to the latest IR35 guidance

(ii) stop the arbitrary blanketing of all Healthcare professionals into IR35 i.e. ensure that trusts follow guidance and take reasonable care when determining status

(iii) stop the imposition of double NICs i.e. payment of both employer and employee NICs

(iv) stop the “bullying or thinly veiled threats” in letters from trusts and/or agencies

(v) act on the interests of members on issues that are ascribed in the constitution, and/or other issues that might have a direct/indirect negative connotation on the aims and objectives of the union


(i) employ the services of a Public and Employment Law Barrister to consider the facts, and either write a non pre-action letter pending a pre- action letter, and/or legal action; and to look at the reliance and legality of an online tool to determine employment status; and to look at the derogation of powers from a public body (HMRC) to other public bodies and agencies that are neither qualified nor have the administrative resources to adequately carry out the task with reasonable care

(ii) employ the services of a Public and Employment Law Barrister to look at the facts, and write (on the unions behalf) legal representations asking NHSI, Trusts, and/or Agencies to take reasonable care when determining employment status

(iii) employ the services of a Public and Employment Law Barrister to look at the deduction of tax mechanisms of Trusts and/or Agencies at source, with a view to stopping unscrupulous corporate behaviour

(iv) employ the services of a Public and Employment Law Barrister to look at, and draft a legal response to correspondence of a “threatening or bullying” nature from Trusts and/or Agencies

(v) employ the services of a Public and Employment Law Barrister on retainer to provide legal services for the union on an ongoing basis

Healthcare workers who are directly employed by the NHS enjoy full employment rights.

  1. Job security
  2. Pension benefit
  3. Annual leave with pay
  4. Study leave with pay
  5. Stipends for Courses for CPD & ALS
  6. Maternity & Paternity leave
  7. Death in Service Benefits
  8. House purchase benefit / discount
  9. Discounted Appraisals


Locum Doctors and nurses under IR35

Locum doctors and independent healthcare workers are now determined as NHS employers only for tax purposes without full employers benefit as listed above.

  1. No job security; job could be terminated within 1hr
  2. No paid annual leave
  3. No pension or retirement plan
  4. No study leave with pay
  5. No Death in Service Benefits
  6. Must pay up to £900 to get appraised by independent appraisal body through agency
  7. Must pay for courses to get CPD points
  8. No paid Maternity & Paternity leave
  9. Not allowed to get NHS staff discount for house purchase
  10. Must work under IR35 as per NHSI
  11. Must pay PAYE tax, Personal NI, Employers NI.
  12. Cannot claim travel expenses
  13. Must pay for their temporary accommodation without reclaiming the expenses under IR35
  14. Will continue to travel long distance to cover for shift without claiming the travel expenses under IR35
  15. Will continue to travel long distances to work where they spend time away from their families in a temporary accommodation without extra income benefit under the new rule (IR35)
  16. Must work under NHS capped rate in most circumstances. This was introduced just about six months ago which has already slashed Locum Doctors income by 30%
  17. Further introduction of IR35 is aimed to completely remove any atom of extra pay benefit for being a Locum Doctor /nurse or a freelancer

We know that the disparity in benefits between the NHS’s permanent staff and its locums justify the higher pay rates that locums earn. But the new rules change everything. The imposition of IR35 treats locum doctors as ‘employed’ for tax purposes. They lose the tax benefits of being self-employed but don’t enjoy any of the benefits of permanently employed NHS staff.


Dr Ben Itsuokor
President IHPA/LDU

NHSI Declare War on Recruitment Agencies and Umbrellas

NHSI Declare War on Recruitment Agencies and Umbrellas!

So NHSI has morphed into HMRC2 now- threatening recruitment agencies that are supposedly using non-compliant umbrella companies. They promise to shut down such agencies and help to bring prosecutions- interesting indeed? They also state: “nurses and locums found to be using these payroll schemes to avoid paying tax and NICs on their full salary, will be reported to their respective bodies NMC and GMC, which may result in their licences to practise revoked IF THEY DO NOT MOVE TO BANK or a COMPLIANT UMBRELLA COMPANY!

Have I missed something here- is NHSI now a department in HMRC or vice versa? And how exactly do they define a non-compliant umbrella- one that does not comply to their policy of blanket IR35.

As for umbrellas and FCSA- are you going b (sic) to take this lying down? Everybody does not want to put their head above the parapet ofcourse- fortunately we’ve heard of an action ensuing.

I wonder if NHSI are acting within their powers or over-reaching yet again. Why can’t public bodies just work within the law- is it that hard? Yet another problem caused by the 2017 Chapter 10 amendments (IR35)!

Stephen Mhiribidi

Head of Legal IHPA/LDU

First posted on Linkedin – 5 October 2017 

Legislation to tackle tax avoidance absolutely necessary

Whilst legislation to tackle tax avoidance is absolutely necessary, it must be transparent.

Healthcare contractors, current situation is akin to dealing with the ‘Mafia’; Don being HMRC, issuing instructions without considering the ramifications. NHS overseeing bodies being the consiglieres – making sure the don’s instructions are carried out, and keeping the mafioso (foot soldiers in provider bases in line). The foot soldiers then arm twist the poor suppliers (the recruiters) to play ball by undercutting the retailers (contractors). The ones paying the dearest price are the end clients (NHS users).

To be clear, I am not saying that they are a mafia- just giving an analogy of how things are playing out. We are getting reports of healthcare contractors been told that they will not be considered for contracts if they dare request an assessment as required by law. We even have in our possession letters from health boards still telling recruiters that ALL healthcare contractors are within IR35 and no representations will be considered.

The poor recruiters who try to do the right thing then lose out to the ones who are playing ball. All the while contractors have either left or reduced their work considerably. Absolute mess!

Stephen Mhiribidi

Head Legal – IHPA/LDU


First published on Linkedin – 23 September 2017

Response to Plymouth Herald – Junior Doctors Understaffing in Derriford Hospital

Youtube Banner-headed paper-modified




The Independent Health Professionals Association is a Trade Association representing dependently contracting health professionals sometimes referred to as locum tenens.



We note, with dismay, your article of 15th September regarding the plight of Junior Doctors in Derriford. Sadly, this situation is far from unique or isolated and is being echoed at Trusts up and down the country. Conditions like these cause a dramatic crisis of recruitment and retention and increased staff sickness which exacerbates the problem and, quite understandably, drives up both the demand for staff to take on additional ‘locum’ shifts and increases the value staff across all hospitals will attach to their precious few days of rest (which many give up when locuming). These supply and demand market forces result in increased locum rates, as those taking extra shifts struggle with such conditions as much as permanent staff.

The present situation is a result of long standing lack of investment in our health service with failure to train enough doctors, nurses, and AHPs creating a vicious cycle which drives those already working to leave plus a number of recent factors affecting the locum market which we are very concerned are missing from the narrative here and being reported as if they were a separate story – when in reality this is a matter of cause and effect with the two problems being inextricably linked.

In the example noted, as in many others, you will have noticed an attempt was made to find temporary staff to cover this rota gap which failed.

There are essentially three reasons why finding temporary cover is failing;

The first is that hospitals are now so underfunded and understaffed that working conditions are often atrocious. This is clearly captured in your article – any independent doctor is voluntarily working under the same conditions and, as you can imagine, this makes it harder to find staff willing to do this.

The second factor is that Jeremy Hunt’s rate caps on ‘Agency’ staff represent a spectacular failure to grasp basic market economics, which should be bread and butter for a party with a free market mantra like the Conservatives. Current locum rates are just a symptom – the actual disease is the fact that our substantive colleagues are underpaid, undervalued, and overstretched thanks to Jeremy Hunt’s New Contract spreading an already too slim workforce over even more hours exacerbated by the fact we’ve been undertraining doctors for decades. Many locum shifts are filled by these same doctors taking on additional hours - of course the rates will be high. If we attempt to cap pay below what the free market rates dictate we will not fill shifts as nobody is going to take them.

The third, most recent, and worst of the exacerbating factors relates to an unlawful blanketing of locum health professionals under a hitherto obscure piece of tax legislation referred to as IR35 – which is stopping locums claiming expenses for hotel bills and flights to cover shifts across the country against tax. This often runs to many thousands and even tens of thousands of pounds. Additionally, if the locums took these shifts they would additionally reduce their take home pay by up to 50%. Despite this the actual tax rules themselves have not changed – only the responsibility for who conducts the assessment has been shifted to the Trusts.

This blanketing was initially instigated following a demand from NHSI that all locum doctors should be taxed as employees -ignoring their, often colossal, indemnity insurance, travel and temporary accommodation expenses and not affording them holiday pay, sick pay, maternity pay, protection from unfair dismissal, pensions or any of the other statutorily protected benefits that actual employees enjoy. NHSI advocated a blanket approach which is well recognised to be unlawful in what is, very clear case law. Our organisation, specifically our doctors advocacy group the Locum Doctors Union, commenced the preaction protocol of judicial review against NHS Improvement and forced them to concede the unlawfulness resulting in updated guidance to trusts which told them they had to conduct individual assessments but did not teach them how to do this lawfully.

Trusts are finding this a huge burden administratively and are grappling with incorrect advice issuing from various government departments.  We have taken action to help the Trusts with this task last week by issuing them with detailed guidance, written by our barrister Michael Paulin, on how to correctly comply with their legal duties. If they follow this we are confident most locums would be found to be outside IR35 and Trusts would pay less money overall.

The fact remains that, at 50% below a free market rate due to increased tax, it is extremely difficult for trusts to fill shifts and as a result of this, Jeremy Hunt’s New Contract and Rate Caps rates are being driven up by government policy whilst contemporaneous attempts are being made to prevent trusts paying them. It is almost as if the government wants bad headlines to manufacture consent for the privatisation of the health service.

Lastly the IHPA would like to state that we stand shoulder to shoulder with our substantive colleagues and will continue to advocate for better pay and working conditions for them as being the only definitive way to address the problems within the system.  More money must be put into training new doctors and NHS careers must be made attractive and financially competitive or we will continue to haemorrhage our best and brightest to places that do value and pay their medics properly.



I do hope this helps add some context to the story. Should you wish to run a piece on the guidance itself please get in touch.

Yours faithfully,

IHPA – HPU – LDU send IR35 Guidance to NHS Trusts

Over the past few months, most healthcare agency workers and locum doctors have been unduly subject to costly misapplications of the IR35 rule.

In the first instance, NHSI “inaccurately” instructed NHS Trusts to apply a blanket approach of classifying all workers as being caught inside IR35. The LDU prepared pre-action protocols for a Judicial Review. NHSI capitulated and updated their instructions, requesting NHS Trusts to carry out case by case assessments.

Unfortunately, whether by design or inadequate knowledge, Trusts have struggled to meet their legal obligation in relation to case by case assessments.

We have now written to all NHS Trusts with the included guidance to ensure that all material factors are taken into consideration when carrying out these assessments.


1. Cover Letter from Stephen Mhiribidi (Legal Director IHPA/LDU) on behalf of Dr Ben Itsuokor (President IHPA/LDU)

Final LDU Cover Letter – Stephen-secure


2. Guidance letter sent out to all NHS Trusts

Final IR35 Guidance 11 September 2017- secure1

Login to access a sample letter you can send to your locum agency consultant


3. Next steps

1. The full guidance is now available for downloading and printing

2. Please print 2 copies- one for yourself and the other for the person assessing you

3. Downloaded copies need to be emailed to the below list and “CC’d” to Vital that you CC to IHPA and request that the response be to all.

Please email to
(i) your agency rep
(ii) reps for all other agencies that you are registered with, but
for now, please only forward to current role agent, then to others when role confirmed.
(iii) the assessor, HR and Finance Directors at whatever hospital your contracted with
(iv) your local Member of Parliament (address to be found at You need to put in your postcode and must be a constituent

Please copy into these email correspondence

5. On the MP issue – any members in Northern Ireland- please write to them, especially if you happen to be in a constituency belonging to an MP whose party is currently in a quasi-coalition with the government. I shall draft a brief explanation that can accompany the guidance to them, and post it here

6. For new roles, please bring out the guidance when the role has been confirmed.



Direct any queries to

Not yet a member? Register for access to IHPA benefits

LDU/HPU A Case for Locums

We set up the locum doctors union on the 25th of March 2017 to defend the right of the locum doctors.

On the 27th of February, Jim Mackey wrote a letter to all the trust and said – ‘As a result of these new rules, we anticipate that providers will need to ensure all locum, agency and bank staff are subject to PAYE and on payroll from 1 April 2017. He further stated that Providers are strongly encouraged to ensure that all staff are contractually paid via PAYE mechanisms. Where this is not the case, trusts should seek approval from NHS Improvement to pay via alternative means’.

This was wrong and NHSI acknowledged this in their surrender letter to our legal counsel.

The NHS authority is thus under a statutory duty to determine, whether or not if the services were provided under a contract directly between the client and the locum doctor, the worker would be regarded for income tax purposes as an employee of the client or the holder of an office under the client, or not as the case may be. A specific duty is thus created by the new legislation, which is one that requires the public authority in question to reach a conclusion as to whether or not the condition is satisfied in each specific case.

It is obvious that the NHSI acted irrationally in the above regard. Mr Mackey’s purported decision that all locums fall within the new IR35 represent a wholesale violation of its statutory duty. It does not exist within the ambit of their statutory framework.

We sought an interim injunction and a quashing order to Jim Mackey decision. NHSI responded on 19th of may, 2017 but rather ambiguously.

On the 8th of May, we instructed Alex Pebbles of Duncan Lewis solicitors and Michael Paulin with the involvement of a QC – Owain Thomas to challenge the decision of NHSI improvement to apply the IR35 scheme to all locum doctors and allied health workers

On May 26th, 2017, the NHSI granted us concessions but did not notify the Trusts. They however changed their guidance.

On May 27th, 2017, we issued instructions to our legal team to accept the new guidance in settlement of our proposed claim for judicial review. we accepted the NHSI concession and surrender.

In light of the material concession, we agree with NHSI that a claim for judicial review was unnecessary at the time but it can be brought back to the table because we reserve the right with respect to any purported and adverse decision taken by NHS providers.
However, NHSI did not communicate their concession to the trusts and hence this line of action

We have decided to inform all Trusts through our legal counsel about the NSHI concession and we are prepared to send out that concession letter if need be. We have released this guidance and is being sent out to all trust in the UK.

Thank you

Dr Ben Itsuokor
President IHPA/LDU

Tackling the agency spend problem the wrong way

The unlawful imposition of IR35 rules without recourse to challenge or consultation was met with mixed viewsI am sure independent health professionals gasp in astonishment when NHSI state that capping agency spend provides “fairness to substantive staff“. 

Agency and Independent health professionals do not enjoy any of the benefits that their substantive colleagues have

  • Sick pay
  • Paid annual leave
  • Paid maternity leave
  • Paid appraisal and training
  • Death in service benefits
  • Access to NHS pension
  • No recourse to employee protection

and being taxed as an employee means that locum doctors will be put in positions where they have to fund all their work related expenses out of their own pocket.

This statement from an independent doctor captures the mood in the health service.


“Independent Doctors support their substantive colleagues, we’re all exposed to the same workplace pressures. More of them are being forced to strike out as Locums because pay and working conditions for substantive colleagues are intolerable. Rate caps won’t solve our substantive colleagues problems but rather deny them relief worker help – in turn making conditions worse and driving rates at which people will take extra hours up, not down. Our rates are governed by workplace environment, and what is driving them up is how horrendous the working conditions are. We will continue to advocate for our substantive colleagues to have better pay and conditions and support those who find the conditions of substantive work so intolerable that they strike out on their own.”


There has been a retention crisis in the NHS which has been made worse by the Secretary of State pushing the 7 day working agenda despite reservations from all corners. This led to the junior doctors contract disputes of 2017, the first full scale walkout of doctors in decades. Morale within the NHS is at an all time low, a decline that has been evident for several years.  The root causes of the disaffection remains untackled yet, locum doctors and independent agency workers are seen as the easy scapegoats to apportion the blame on.