Off-Payroll FAQ

Click any of the questions listed below to reveal the answer.

Q. The supplier only provides goods, do I still need to fill in the FD3 form?

If the supplier is only or predominantly providing goods then an FD3 is not required. If the supplier is providing services but also some materials then they could be affected by the new Off Payroll Worker legislation and an FD3 is required.

Q. If the supplier is a sole trader why do I need to fill in the FD3 form?

Under the existing FD3 process sole traders would need to be assessed as to whether they should be treated as deemed employees for tax purposes.

Q. If the supplier is used by multiple departments, do I need to fill an FD3 form? Will it be filed centrally?

To decide whether a supplier falls under the Off Payroll Worker legislation for the University as a whole it is necessary to get a complete picture of all the services they are providing, which requires each department using them to complete an FD3.

Existing suppliers for whom an FD3 was not required and suppliers that have gone through the FD3 process will be marked as such on the supplier database. A new FD3 form may be required for existing suppliers if the frequency of use or type of service provided changes.

Q. If I know that it's a big limited company do I still need to submit an FD3?

Clearance from the Tax Team may be obtained for certain suppliers without submitting an FD3:

- Institutions / organisations / charities

- Landlords or accommodation providers

- Catering providers

- Companies with more than 10 employees (other than employment agencies)

The request for tax clearance (or extension of an existing one) of the above suppliers, should be sent to the Tax Team by email to FD3@admin.cam.ac.uk [1] [1]and include the following information:

- Supplier name and CUFS supplier number (if already on the system)

- Company House reference number if applicable

- Supplier’s website if any

- Quote and/or document supporting agreed terms of engagement

Based on the information provided the Tax Team will either issue a clearance number, request additional information or ask the department to submit an FD3 form.

Q. If I definitely know that the service provider will NOT be OPW do I still need to submit an FD3 form?

An FD3 is still required. These points will be checked by the Tax Team and in such cases clearance should be straightforward.

Q. Can limited companies providing lecturing, teaching, examinations, demonstrating or conduction supervisions be paid via UPS1?

UPS1 is designed only for individuals. Any payments made to limited companies or limited partnerships where the Off Payroll Worker legislation applies will need to be processed through UPS4.

Q. Will instructions on the new UPS4 and agencies follow at a later date?

Further instructions and information are being released on an on-going basis. There will also be training.

Q. Please can you provide clarification as to when an ‘agency’ may require an FD3 to be completed?

Preferred agencies have been informed that in our view any workers they send will be treated as Off Payroll Workers and we expect them to account for PAYE and NI on any amounts they pay to such workers. For non-preferred agencies, an FD3 may be required.

Q. It says we need ‘documentary evidence to back up answers to the FD3 form’. What kind of documents do you require?

This could include draft contracts, quotations or estimates of the work to be provided or other correspondence with the proposed service provider that evidences the scope, nature and duration of the services.

Q. Are repair to properties/catering equipment etc classed as a service? Does the company need to be assessed?

The Off Payroll Worker legislation could apply to many different types of services, including repair of equipment. On the basis of the information provided in the FD3 this should normally be readily apparent and a corresponding determination will be given.

Q. If the work will take place before 6th of April, do I still need to fill in an FD3 form?

If payment for the services will be on or after 6^th April 2017 then the new legislation will apply and an FD3 is required.

Q. I contract with the company and do not have details of the service provider's name. What should I do?

The FD3 form should be completed with the information available. If necessary the Tax Team will request that the department contacts the service provider to obtain additional information.

Q. Can you tell me if we have to fill out a UPS4 form for each invoice we receive from a supplier that has been deemed an OPW?

Yes, that is the intention.

Q. If a supplier has an overseas bank account but the work is performed here, do we just go through the normal IPO process as well?

On the expectation our Tax colleagues have judged the foreign registered supplier to be an off payroll worker and any payments made need to be taxed.

The UPS4 is submitted in the ‘normal way’ – eg to shared services - it will of course have to be converted into a sterling value as UPS only works in GBP. Once the ‘payroll’ has been run and the necessary deductions made. Alexsis / Payroll team will instruct the Cashier to make a ‘foreign payment’. We do this all the time for other UPS payments.

You just need to provide the ‘foreign’ bank details either on the UPS4 or attached to it. The department does not make the payment direct.

Q. My question is not answered or I need more information.

If you have any questions that aren't answered on the main page, please let us know on selfemploymentstatus@admin.cam.ac.uk [2]