Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Status Manual

From
HM Revenue & Customs
Updated
, see all updates

Particular occupations: nursing staff engaged through agencies

Nurses may undertake long-term or short-term engagements arranged through nursing co-operatives, bureaux, or agencies. The nurse may be paid either by the client or by the agency etc. or by an intermediary such as a service company.

Where the agency provides only an introductory service and contractual arrangements are made directly between nurse and client, the agency legislation does not apply. The terms and conditions under which the nurse works for the client will determine the correct schedule of charge and class of NICs (see ESM0500onwards and ESM4250).

The taxation treatment of the fees for engagements under an agency contract will depend on the particular facts. These include whether or not the nurse is qualified, that is holds a qualification recognised by statute such as a State Registered Nurse, or a foreign qualification recognised by the UK Central Council for Nursing, Midwifery and Health Visiting (UKCC). Here are some examples.

  • A nurse, whether qualified or non-qualified, may exceptionally be an employee of the agency. If so, the nurse’s emoluments will be chargeable as employment income and there will be liability to Class 1 NICs.
  • A non-qualified nurse working in the client’s home or elsewhere who is not an employee of the agency will nevertheless generally be treated as such under the agency legislation. This is because the nurse will generally be `subject to, or to the right of, supervision, direction or control as to the manner’ in which the services are rendered.
  • A qualified nurse who is not an employee of the agency, working in the client’s home, will generally not be subject to, or to the right of, supervision, direction or control over the manner in which he or she carries out the work. In such a case the nurse will not fall within the agency legislation. The fees will be chargeable as trade profits (see BIM62651) and the nurse will be liable for Class 2/4 NICs.
  • A qualified nurse, who is not an employee of the agency, working other than in the home of the client, will generally, be treated as an employee in accordance with the agency legislation. This is because the nurse will usually be subject, or to the right of, supervision, direction or control over the manner in which he or she carries out the work.

Offices dealing with nursing agencies should therefore recognise that qualified nurses may be:

  • in the employment of the agency
  • self-employed, that is those engaged entirely on ’home’ nursing
  • in effect treated as employed under the agency legislation, that is those engaged entirely on `non-home nursing’
  • providing their services through a service company (see ESM3000).