Primary Care People, a medical staffing agency, has fallen into administration after struggling to repay debts.
The company filed notice of intention to appoint administrators on 30th June.
Who is Primary Care People and why did they fall into administration?
Primary Care People claims to be among the UK's top medical recruitment agencies, and offers more than 15,000 locum jobs in the UK.
They fell into administration following several cash-flow issues.
The IR35 tax reform
Troubles began with an "over-ambitious approach" to the new IR35 tax reform.
These changes shifted the onus of deducting tax away from locums themselves and onto the practices they were working for.
Primary Care People decided to take on responsibility for IR35 by choosing to invoice all practices on behalf of their employees. Through doing this, they hoped to eliminate the risk of IR35 breaches for the GPs they had on their books.
However, this effectively meant that Primary Care People took an additional 170 GPs onto their payroll. Perhaps unsurprisingly, the agency could not support this sudden increase in expenditure and failed to pay all of its GPs.
Subsidiary company issued with winding-up petition
These issues were compounded by Evolve Resource Solutions Ltd, a company owned by Primary Care People, being issued with a winding up petition by Locum Staffing Ltd.
Business representatives were due at Company Court on Monday 3rd July to decide whether it should be liquidated to pay off creditors.
The hearing was adjourned and rescheduled for 17th July as Primary Care People was already in administration at the time of the wind up petition. On this date, the court will decide whether to order a compulsory liquidation, dismiss the case or adjourn until a later date.
What does this mean for Primary Care People's GPs?
Primary Care People is still trading, so the locum GPs they employ are still able to work. However, many seem unwilling to do so as they are not certain that they will be paid.
Originally, the company promised to make all outstanding payments by 30 June - the day it announced it was entering administration - but did not achieve this. Primary Care People then apologised for failing to meet this deadline.
Now, most of the 70 GPs affected have been paid. But social media suggests some are still owed thousands of pounds by the agency.
Payments are now up to four weeks late, and some have begun to hire debt collectors and are considering legal action.
Dr Matt Mayer has not been fully reimbursed for the work he completed. As of last week, he had been paid 75% of more than the £5,600 owed. The remainder is expected to be on its way.
Through either liquidation of one (or more) of their companies, or a complete restructuring, it is believed that Primary Care People will ensure that the locum GPs receive what is owed: