Temporary staff working at the NHS can be both costly and difficult to administer. Depending on how they are engaged they can also add tax risk to you, the Trust.
If you hire them directly, you must screen them, induct them and then on board and off board them on your payroll.
Alternatively, if you hire them via an agency you have the additional cost of the agency margin and 20% VAT on the total cost being the aggregate of the workers gross pay, employer’s NI, apprenticeship levy and agency margin. The use of so-called medical services companies was thought to avoid the VAT charge on workers’ pay but the legitimacy of this approach has been confirmed as invalid by HMRC, predominantly on the basis that they were supplying labour and not medical services.
Employment and tax law seem to get more complex each year. With off-payroll working rules now in place in the public sector and the government’s Good Work Plan coming into effect in April 2020 there is more and more responsibility and risk with the Trust. Under the Off-payroll working rules you are now responsible for deciding the employment status of any limited company contractor you have anywhere in your supply chain. This brings financial and reputational risk and complexity. Getting it wrong can be costly. For a contractor earning £100,000 per annum the gross tax liability including interest and moderate penalties would be £100,000 over a three-year period. For further reading please see our white papers on off-payroll working.
In summary, managing the temporary staff yourself requires you to have specialist software, skills and expertise, and of course the resource to manage it. Alternatively managing via recruitment agencies adds significant cost.
the ideal solution
The ideal service solution would give you full control working with a trusted partner and costing you less than it would if you did it yourself. The partner would provide efficient end-to-end software and well-defined processes which are always up-to-date to ensure cost efficiencies and protection from employment and tax risk, now and in the future. The engagement models should be free from any legal and tax challenge and give you the benefit of specialist advice to ensure you have no financial or reputational risk.
Other important considerations would be efficiency and speed of processing, flexibility to deliver payroll at any required frequency and, accountability for the workers employment status and payments. An established and proven service provider should also be able to offer cloud based end-to-end software which forms the backbone of a robust proven process with real-time accurate reporting for control and decision-making.
Additional value-added services such as pre-employment screening and legislative advice are always advantageous.
It is not easy to select a trusted partner. If you require assistance or advice or simply want to explore your options please contact us on 0330 024 0946 or firstname.lastname@example.org. We would be delighted to help you.