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HMRC and NHS IR35 Hoax or Manipulation

Time is running out for all the mis-informants about the impact and consequences of the IR35 (off pay-roll) working arrangements in the public sector as well as the wrong-doing of HMRC. Do you know IR35 is related to the Loan Charge, the recent proliferation of Umbrella companies, the use of Direct Engagement models by NHS Trusts to avoid paying VAT?

Dear Finance Bill Sub Committee,

I am the Secretary General of the Independent Health Professionals’ Association. We are an association representing over 3000 self-employed doctors, nurses, and allied health professionals.

We hold evidence obtained by FOI which shows the claims HMRC made to your lordships with respect to not foreseeing any great impact on the NHS are demonstrably incorrect.

Specifically, we have an email between HMRC’s IR35 lead Mark Frampton and NHS Improvement’s then most senior person on agency policy Martin Innes (Senior Operational Agency Data and Intelligence Lead) in which the issue of (unlawful) IR35 blanket determinations denying people self employed status, regardless of their true employment status, due to the April 2017 Public Sector Off Payroll (IR35) reforms was causing people to enter into so called ‘disguised remuneration’ umbrella schemes. HMRC has denied this will impact the NHS - this is not what their IR35 lead is saying in internal emails.

We are also concerned about abuse of powers in relation to misleading, forcing and cajoling public bodies into adopting blanket IR35 stances - doubly important as Phil Hammond MP has just announced their intent to extend this disastrous change, which I would go so far as to say is causing widespread unlawful treatment and detriment to contractors, to the private sector. Workers affected are disproportionately from BME groups.


  • HMRC have mislead your lordships during this enquiry as regards the impact of the Loan Charge on the NHS - they claimed it was not expected to have impact but we enclose an email between their most senior IR35 policy lead Mark Frampton and NHS Improvement’s most senior official on the agency side Martin Innes.
  • Summarised is also evidence that HMRC attempted to avoid disclosing this email by FOI without citing an exemption. The email was uncovered because the same request was submitted to NHS Improvement in case this would happen.
  • The April 2017 Public Sector IR35 reforms (ITEPA Chapter10) are, as the email shows, driving people into loan schemes (this matches our extensive experience of the market).
  • HMRC have been engaging in a campaign of deliberate misrepresentation to deny most workers in the public sector self employed status, and this includes all hospital doctors, nurses, and AHPs (even where this would not be their correct employment status.
  • This despite the fact that the case of Mr Ian Mitchell FRCS & Dr Bhimagunta v HMRC in the FTT in 2011 is the only case where a doctor has had their employment status tested and the junior doctor was found to be outside IR35 whilst assisting in surgery.
  • Tens of thousands are being forced into false employment without employment rights by Mel Stride MP’s IR35 reforms, and particularly the fact that they make it ‘risky’ to allow people to be outside IR35 (as you get hit with liability for this but not for wrong inside IR35 determinations).
  • Evidence of unminuted webinars by Mark Frampton and NHS trusts (we have recordings of one of these if your lordships wish that we submit it please contact us) with the goal of finding all workers inside IR35). See this article, we can provide the recording file if useful (over 300mb in size so not attachable to this email).
  • This has been denied this is happening by both Stephen Barclay MP and Mel Stride MP, we attach evidence from numerous NHS trusts - including them claiming they were told to by HMRC. With respect to the false claims this is not occurring made before parliament by the above named MPs -we suspect they may simply be believing what they are told by civil servants who are misrepresenting the true state of affairs. The other possibility is that they could be misleading parliament.
  • As a result of this ONS statistics show a 20k drop in the number of self employed doctors in the country (attached) with an 11k drop in total doctors. Some of those who appear to be employed are likely working with ‘employment umbrellas’ including loan schemes.
  • We have also seen widespread attempts to override statues and the intention of parliament where some SLAs and framework agreements contain causes attempting to bind the ‘fee payer’ to do whatever the public body tells them to (invariably a blanket decision) whether or not the conditions for making the deduction lawfully in the act are met.
  • I would be happy to attend, even at short notice (I would need to book flights) to give oral evidence if your lordships feel it would be useful.
  • There is evidence that these reforms are adversely affecting NHS services on a local level too. CEO of Colchester Hospital Nick Hulme (since merged with another hospital) banned his staff from speaking up on short staffing. Their corporate risk register is included which includes a comment that they are down 100 additional nursing shifts per week as a result of the public sector IR35 reforms. The trust is known to be blanketing.
  • Unfortunately many of our colleagues have been caught up in Loan Schemes and NHS trusts are turning to so called Direct Engagement aggressive tax avoidance vehicles which purport to avoid the VAT associate with a supply of a worker and pass on the employment taxes to the worker.
  • As a result of this we have dieticians on £15 per hour paying the Apprenticeship levy - a tax levied on businesses of gross turnover greater than £3million from their take-home pay..
  • We are not aware of a single NHS trust in the UK which is applying the public sector IR35 reforms correctly, affording individual assessments with required reasonable care. Our view is that the reforms have been a disaster and a constitutional affront to the rule of law.
  • We also hold evidence of blanketing in atomic energy, network rail, HS2 & Crossrail, the MoD, education, and even within HMRC itself. We suspect this is likely to be released to, for example, delays in the Crossrail project and headlines about increased rates of workers (in reality the take home is the same but the contractor has increased their rate to pass this on).
  • We do wonder whether this could be related to the 10,000 excess deaths within the first 7 weeks of 2018 not related to the weather, influenza or an ageing population as reported in the BMJ (effect on health, social care, DWP and all other departments combined). It may, obviously, be one factor amongst many, but this would make a good subject of an enquiry.


It will interest your Lordships to learn that, due to suspected collusion and failure to disclose information, I submitted the same FOI for all communication between these individuals to both HMRC and NHS Improvement. HMRC did not disclose this email and tried to conceal it. Disclosing 34 other emails but not this one, nor does it appear to have been redacted under an exemption. Furthermore, NHS Improvement claimed to have released all information it held but only released a handful of emails (around 30 were not disclosed despite claiming it had disclosed everything). This appears to me to be an attempt at concealment and I will be seeking the assistance of the information commissioner on both sides.

The email which HMRC attempted to avoid revealing but which NHS Improvement disclosed (presumably as it is worried about this) shows that it is known that the public sector IR35 reforms have been driving people into loan schemes (and this has continued even after the loan charge was introduced).

I would like to thank the lords for the excellent job they have been doing of holding HMRC to account for its mantra of ‘Maximising the revenue whether it is right in law or not’ as Barrister Keith Gordon so aptly put it before the Treasury Select Committee recently. HMRC are a law unto themselves, they ignore the case law in an endless quest to garner as much money for the treasury as possible - whether or not this is actually correct in law.

Many thousands of health workers have been affected and the attached Office of National Statistics data shows an 11,000 reduction in the number of doctors in the country, something likely to be a result of these measures (analysis attached).

We wish to highlight major failings, and what appear to be deliberate attempts to misrepresent the law on industrial scale in order to ensure blanket inside IR35 determinations across the entire public sector denying public sector workers self-employed status where the courts might be likely to find an individual self employed following the Public Sector Off Payroll reforms introduced in the Finance Bill 2017 (ITEPA Chapter 10).

My Lords, will be aware that the case law requires that every employment status case be assessed individually considering the ‘full factual matrix’, that individual contractor factors such as overheads and business set up are important, as is individual competence and willingness to be engaged in certain ways (with respect to the case law tests known as supervision direction and control, for examplel), being part and parcel, and numerous other factors. We previously launched a successful Judicial Review against NHS Improvement with respect to unlawful blanketing on the grounds that they were fettering their discretion - this was conceded in Pre-Action phase on 30th May 2017 and we co-authored guidance with NHS Improvement which it then circulated explaining that individual assessments were a requirement.

This occurred only for a space of weeks before HMRC intervened and insisted NHS trusts should blanket, despite the fact that the reason we succeeded against NHS Improvement was that this practice was unlawful. I attach numerous letters form NHS trusts referring to this some of which state bluntly that ‘subsequent advice from HMRC has said that blanket assessments are acceptable"

We hold recordings of unminuted HMRC webinars with numerous NHS Trusts by HMRC’s IR35 lead Mark Frampton, at which HMRC, in my view deceitfully, attempts to claim that the contract law definition of mutuality of obligations should be applied in employment status - this is at odds with every single tribunal decision of which I am aware. They claim that if there is ANY form of contract then the employment status test of mutuality of obligations is met - this is demonstrably false. Every single IR35 case that has occurred has considered this test, and in those instances there is almost always a contract. What matters is not whether or not there is a contract but whether the actual working engagements are such as to be in keeping with a ‘contract of services’ (read employment contract) regardless of what the contract may purport to be.

The correct definition is of an irreducible minimum of Mutuality of Obligations, this actually means that there is an obligation upon one party to offer work, and upon the other party to accept work of sufficient strength to render one party master and one party servant. As HMRC well knows the actual terms of these workers are generally 1 to 4 hour notice periods for either party to terminate the agreement (subject to any patient safety considerations). HMRC is misrepresenting the law here to enforce blankets.

HMRC has publicly denied this is occurring but I attach evidence of blanket IR35 assessments - several thousand job adverts showing both an inside IR35 status determination prior to candidate selection and a request for CVs (clearly showing this is pre-candidate selection) and additionally letters stating blanket positions from numerous NHS trusts.

My lords will be aware that the only doctor whose employment status has been challenged at tribunal was that of Dr Bhimagunta, a junior doctor assisting in surgery, and that it was held substitution was neutral as he was highly skilled, MOO was not present, and the degree of SDC was inadequate to constitute employment. Yet HMRC are claiming all doctors are caught because hospitals produce protocols which, as autonomous practitioners, our members are not obliged to follow.

They are ignoring tens of thousands of pounds of business expenses - last minute flights across the country to cover shifts, hotels and hospital accommodation, locum indemnity insurance (which is higher than that for normal doctors), subsistence expenses,mandatory training, private revalidation and appraisal arrangements which run into thousands of pounds. Losses can be made against these amounts where one falls sick or if the notice period (often 1 hour) is exercised.

I once found myself committed to months of accommodation costs after a contract was terminated which meant I made thousands of pounds of loss against the engagement. This risk was run in an attempt to reduce the expense of hospital accommodation which backfired when they attempted to renegotiate my rate at a level which would cause a greater loss than this over the entirety of the contract - this sort of financial risk helps place an individual outside IR35.

In addition to the many health workers who entered into such schemes following the IR35 reforms, a few entered into such schemes beforehand. I am meeting weekly with one such suicidal doctor who has twice slit his wrists with the intent to end his life. He is displaying what I professionally know to be all the red flags of a serious attempt - having written a note and attempted to avoid detection, for example. He did not save any money from being forced to go through such a scheme as they paid him the same as he would have made through a company. He was advised to do things this way when he said he did not want to handle the paperwork of running a company by his agency. He did not understand how the scheme worked. He now faces bankruptcy and was considering ending his life with view to protecting his family from the loan charge - on the presumption that if he were not alive at the time the charge came in he could protect their home and security. He is near retirement and has no pension.

The reforms may even not have saved any money due to the explosion in direct engagement tax avoidance schemes dodging VAT and reduction in the number of self employed workers in the country.


It is my view that HMRC routinely misconstrues the legal position and should be stripped of its ability to write guidance. This is because it has a clear conflict of interest and does not put tax payers first. Its stance on MOO is at glaring odds with the caselaw. HMRC has a vested interest in not writing balanced guidance. A new body should be created which is responsible for writing impartial advice.

I would suggest urgent review of the public sector IR35 reforms which are damaging patient care with view to their repeal or strict enforcement of individual assessments (which may well be unworkable your lordships, this is an example of a policy which works so badly in practice as to predispose non-compliance). NHS trusts do not have the knowledge, manpower or resources to comply with the legislation.

I would suggest that the retrospective element of the April 2019 loan charge be reversed as it will cause bankruptcies.

I further suggest a full scale public enquiry.

Many thanks for considering this evidence, despite its being submitted after the closing date. I felt compelled to do so because I held evidence that HMRC’s claim the NHS would not be affected by the loan charge was so obviously false, and my experience of HMRC’s behaviour since April 2017 gives me great concerns about its abuse of power.

Yours faithfully,
Dr Iain Campbell MBChB FRSPH
Secretary General,
Independent Health Professionals Association