Company or individual?
Limited Company - If the worker is a Limited Company or invoices us on behalf of a limited company that is registered with Companies House then neither the company nor the individuals will be employees.
Please note that the payments to limited companies must ALWAYS be made direct to the company and if the individual requests payment to themselves or raises an invoice in their own name then HMRC will conclude that the relationship is with the individual and not the company. This would mean that employment status would need to be considered.
However, with effect from April 2017 the University will have an obligation to declare PAYE and NI on behalf of Personal Service Companies (PSCs). Procedures will be updated once the full impact and mechanisms have been determined.
Small business - If the business invoicing us is not a limited company then in reality we are dealing with an individual. Even if they have headed paper with a trading name and a business bank account, the University still has a relationship with an individual. These cases should be considered using these guidelines.
If a worker has employee or worker status with the University then they are automatically covered by University insurance policies. However, if we are paying an individual gross on a self-employed basis then it is very important that they have appropriate insurances in place.
We would normally expect a self-employed individual to have:
- Professional Indemnity Insurance, and
- Public Liability Insurance
If the self-employed individual does not have this insurance cover then the University could potentially be at risk. Therefore, insurance is an area that must be considered carefully when determining employment status.
If you have any queries regarding the individual and their insurance position or if the circumstances are not straightforward then please contact the Insurance Team as soon as possible.
Telephone the Insurance Office on 32216 or 39659
Quotations/tendering for contracts for services
The University's Financial Regulations set out thresholds for obtaining competitive quotes/tendering. These competition procedures are applicable unless a dispensation has been granted in accordance with Schedule 1.
Information, guidance and standard forms are available from Procurement Services
Telephone Procurement Services on 65100 or 64328
The University Financial Procedures for Procurement can be found online.
Is the individual being hired a University Pensioner?
There are often problems with attempting to re-employ someone who has retired and has received payment from one of the University Pension Schemes. Occasionally, people try to avoid these problems by paying the individuals via an invoice instead of through payroll.
The same employment status tests apply to the reality of the relationship between the Pensioner and the University, as between an individual and the University. The Pensioner cannot be considered self-employed just because it is easier to do so or it represents the wishes of the Pensioner. This does not mean that a Pensioner cannot be considered self-employed if the circumstances show that is the true nature of the relationship.
If employee status is confirmed a contract must be signed and the your School HR Team should be consulted. They have a range of contract templates available for use and can advise appropriately.
If you are considering the hire or employment of a University Pension Scheme Pensioner advice MUST be sought from the Pensions Administration Section.
Pensions Administration Email email@example.com
School HR Teams for details use the search facility here