When the University pays an individual a sum of money for service(s), consideration must be given to whether the terms and conditions under which they are providing the service(s) make them an employee or self-employed.
Employment status is not a matter of choice, it cannot simply be decided that someone is self-employed just because the individual wishes to be paid that way or because the University wishes to pay them that way. It is not conclusive to just call or consider someone self-employed; it is the reality of the relationship between the University and the individual that matters.
There is no statutory definition of 'employment' or 'self-employment' each case has to be looked at as a whole with all the factors considered. However, it is the University's responsibility (not the individual's) to determine the correct status properly. If the correct status is not applied the University may be liable for any unpaid taxes and National Insurance contributions (NICs), which could result in a liability to pay penalties and interest.
It is worth bearing in mind that just because a person is self-employed in one job doesn't necessarily mean that all their jobs will follow suit. The individual can still be considered 'employed' in another job at the same time.
It is also possible that an individual who is properly considered to be self-employed when they begin providing services to the University may over time become increasingly integrated into the University to the extent that their status may change to that of an employee. It is therefore important that:
- self-employed contractors are not treated as members of staff (e.g. not issued with a University Card, not given the title of a University Office, not managed through normal disciplinary or grievance procedures in the Staff Handbook/Guide); and
- if their working with the University lasts for a prolonged period (e.g. more than one year) that it is reassessed to see if they should be paid through the payroll in future.
Where there is a relationship...
Where there is a relationship between an individual and the University for providing service(s) there should always be a valid written contract in place. This could be a contract of employment (a contract of service) for employees or it could be a contract for services (non-employees). A model contract is available at the end of this page.
For very short low value engagements (up to £3,000 in total) a letter detailing the work to be done, timescale and amount to be paid will be sufficient. Model letters for use in these circumstances are available from Procurement Services.
In limited circumstances, individuals providing lecturing, teaching and higher degree examining or supervising, may claim payment via a UPS1 claim/payment form. This is discussed further in these pages.