FAQ's - HMRC

Why is employment status important?

As per HMRC regulations we need to check that the work is self-employed.  If it is not, then we need to account for the tax and National Insurance.  The University will need to be able to satisfy HMRC that the work can be paid gross as opposed to being taxable through payroll.

Heavy fines are imposed on employers who do not comply and any taxes not deducted for work which HMRC deem as employment, will be paid by the University.

HMRC periodically request details of payments made to individuals, so the University needs to operate strict procedures for suppliers who are self-employed individuals and retain records within T1 for future audits.   You should also retain your own copies for reference.

Yes, we will at some point have an audit by HMRC to ensure the University are following correct procedures.   When HMRC audit this area, they will note the Employment Status questionnaire outcome and then look for evidence to satisfy themselves that they accurately reflect the day to day working practices of that particular engagement.

If HMRC decide we have wrongly given self-employment status, HMRC can recover any unpaid tax, NICs, plus interest from the University and may apply additional penalties.

The HMRC outcome is “the individual should be treated as a worker/employed” or “the intermediaries’ legislation applies” - payments will be subject to PAYE tax and NIC deductions by the University – what does this mean?

Engage through HR or Casual Claims process.  See business rules

The HMRC outcome is “the individual should be treated as self-employed” or “the intermediaries’ legislation does not apply” - payments are not subject to PAYE tax and NIC deductions by the University

Follow the procurement process and payment will be via invoice.

For further information please contact e-claims@exeter.ac.uk