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The purpose of this guidance is to set out:

  • Why it is important to determine correctly whether individuals engaged by the University may be paid against invoices (self-employment) or UPS1 claim forms (in limited circumstances) or must be paid through payroll (employment);
  • the University procedures for establishing the employment status of individuals; and
  • the factors which influence the decision on employment status.

These guidelines apply to individuals; a Limited Company is not an individual.

From April 2017 new rules will apply to payments made to contractors providing services via a limited company (a Personal Services Company). Currently the contractor is responsible for determining whether PAYE and National Insurance are due and the University does not need to check this and can simply pay invoices presented. 

As from 6th April 2017 the responsibility to determine the employment status (for tax purposes) of these contractors will transfer to the University and if the individuals providing the services meet the new criteria then the University will need to deduct PAYE and National Insurance from payments.

As a result changes will need to be made to current FD3, Accounts Payable and UPS processes. To determine what these changes are and how they will be implemented a multi-functional working group has been established.  The working group has also been tasked with providing detailed guidance that will be circulated as soon as possible in the New Year.

It is important that you consider the implications of this change as it may be relevant to arrangements you are currently negotiating or have already agreed. If you require any immediate help or guidance please contact the Taxation team on

Who needs to read this guidance?

Anyone involved in any of the stages of hiring someone for any kind of service(s) (outside of the normal recruitment procedures). This includes identifying the need to hire someone, interviewing/tendering, or making the payments. Also, Departmental Administrators, Finance and Human Resources staff.



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