A last minute amendment to new financial law has potentially saved the community pharmacy sector millions of pounds in National Insurance contributions.
The Government altered the law to amend its definition of the public authority employers affected by the changes to taxation.
The law, proposed within the 2017 Finance Bill, could have resulted in rules intended for self-employed staff working for the Government also being applied to community pharmacy.
This would have meant businesses could have been forced to pay enhanced National Insurance contributions when employing locum pharmacists and other non-permanent workers.
Responding to concerns raised by its members, the National Pharmacy Association (NPA) said it made HM Revenue and Customs (HMRC) aware of the fact that this increase would apply to community pharmacies as well.
‘Raising the alarm’
An NPA spokesperson said that the move will potentially ‘save the sector millions in tax’.
‘NPA finance staff used their network to find out more and raise the alarm, reaching out to senior people within KPMG and HMRC. Shortly afterwards, the Government confirmed that it would lay a last minute amendment to the Bill to remove pharmacy from scope,’ they said.
‘The NPA is pleased to say that the amendment passed just before the Bill was passed – one of the very last things Parliament did before it was dissolved for the general election.’
The amended proposal
The Government’s amendment says: ‘Schedule 1 is amended to correct a technical error in the definition of “public authority”, which unintentionally brings some private sector businesses within the scope of the off-payroll working in the public sector measure because they provide services on behalf of the National Health Service (NHS).
‘Prior to this amendment, private sector retail businesses, including high street pharmacies and opticians, would have inadvertently been within the scope of the off-payroll working in the public sector measure.
‘As a result, such businesses would have been required to consider whether the new rules applied to all contractors working for them through an intermediary. This was not the intention of this policy.’