Possible implications of the IR35 tax reforms

Commenting on the possible implications of the IR35 tax reforms, Rachael Wardell, Chair of the Association’s Workforce Development Policy Committee, said:

“These changes will impact on some kinds of locum social worker, but not others, so local authorities are currently preparing for implementation by studying what this will mean for their local workforce; determining their own contingency arrangements to manage the implications at a local level; and paying close attention to any “perverse consequences” that might negatively impact on the vital services we provide to children and families. Local authorities have to comply with the new law and given the tough financial context in which we operate, managing a rise in demand for our services alongside severely reduced resources, it’s important that the market is effectively managed to ensure it provides a quality workforce and that our limited resources are being used to best effect. Most authorities are part of a regional Memorandum of Understanding (MoU) and have introduced pay caps for agency staff to effectively manage the demand for, and supply of, agency social workers. Where these MoU are in operation we would expect them to be updated to mitigate any destabilising effect on the market, and to continue to bear down on costs as local authorities are not in a position to pay higher rates to compensate for the loss of earnings some social workers may experience as a result of these changes.

“The full impact of these changes on the recruitment and retention of social workers is yet to be seen. It could lead to some social workers leaving the profession altogether but there may even be a benefit in some areas in that, if the difference between being a locum social worker and being employed by a local authority is no longer an appreciable increase in take home pay, some social workers might choose to become permanent rather than remain as locum workers. That being said, most social workers value the flexibility and work-life balance offered through agency work over the money and we hope that committed social workers would remain in the profession despite these changes.”


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