Payment Options for one-off or short term assignments
The guidance below is to help the decision process when considering the employment status of certain roles. It is only a guide and will still require the relevant University process to be followed.
- For guidance on engaging a casual claimant (on payroll)
- For guidance on engaging a self-employed worker (off payroll)
For more information please contact firstname.lastname@example.org
Academic programme or course developer
These roles relate to the process of designing or updating a programme in terms of structure e.g. how many modules, module credit ratings and identification and description of module and programme learning outcomes.
Typically, this would require a formal programme approval or a re-approval process to be enacted and, because of this, it is likely that this would be on-payroll.
Academic programme or course content developer
Writing the content that sits within a module, or module authoring, such as study guides, written material and PowerPoint presentations, etc. Detailed specification is provided to the content developer. How the task is undertaken to produce an output based on that specification, however, is for the developer to decide.
If this work is outsourced to an individual because of their expertise, then it is likely that it would be off-payroll.
Experts by experience
Engaged by the University to provide ad hoc input to discussions with students and input to course material, etc. These would usually be engaged on an ad hoc basis and be paid off payroll.
Interview / expert panel members
The panel member would be engaged by the University to sit on an interview panel or expert panel. They would ordinarily be paid by the hour on an ad hoc basis off payroll.
Treatment will be similar to that for occasional lecturer, likely to be off payroll.
Sports coaches or gym or fitness class instructors. Where the individual is engaged by the university to run a regular class or coach a university team using the university premises and does not work for
anyone else, they will be on payroll.
If the instructor hires the facilities at the university and is paid by the students directly, so they are taking the financial risk if no one turns up for the class and they still have to pay for the room hire, then they are likely to be self-employed and off payroll.
Full Time Lecturer
A full-time lecturer will normally be an employee and on payroll. This follows from the terms and conditions of engagement which usually include some or all of the following features that point towards
- Payment of a salary
- paid holidays and sick leave
- availability of pension scheme membership
- no financial risk for the lecturer
- control (or right of control) over matters such as conduct and discipline, hours of attendance,
- where and when lectures are given and, possibly, detailed control over what is taught (forexample, course to follow a set syllabus), etc.
Part time lecturer
A part-time lecturer whose engagement covers a complete academic term or longer and who has similar terms and conditions to a full-time lecturer is likely to be an employee and on payroll. But someone who is taken on for a whole academic term or year but only for, say, two or three hours a week and on different terms and conditions to full-time lecturers, is more likely to fall within the guidance given
for occasional lecturers below.
Sometimes lecturers are engaged on a less formal basis to give, for example, a series of lectures on a particular topic. They are the group whose employment status for tax purposes is often the most
difficult to decide. In each case, it is necessary to consider all the circumstances, including:
(a) The terms and conditions of the engagement:
- Control (or right of control) over conduct and discipline, hours of attendance, where and when lectures are given, course content, etc.
- Whether the individual must undertake the lecturing personally or whether a substitute can be sent.
- Who is to supply the equipment necessary
- Whether any financial risk attaches to the engagement (financial risk would be a pointer towards self-employment - but most engagements will lack any element of financial risk).
(b) Factors personal to the lecturer:
- Many short-term lecturing engagements with different institutions.
- A business approach to obtaining and organising his/her engagements and expenditure in this area of a type not normally associated with employment (for example, provision of office accommodation, office equipment, etc).
- elf-employment in a related full-time (or substantial) profession or business where occasional lectures are regarded as part of the individual’s profession or business.
Musicians are traditionally considered to be self-employed but may also be employed depending on the circumstances. Some musicians, however, work under a contract provided by the Musicians’ Union. This type of contract has been specifically agreed and includes clauses that may lead you to believe that the musician is employed this may not, however, be the case. You will need to look at the working practices to establish the employment status of each individual. Likely to be off payroll.
The musician may be employed if they are required to perform in a series of different productions over a period of time for regular pay. The difference may also be whether they are paid regularly by the university or paid by the student.
Actors, dancers, role-players, writers, authors, poets and other performance artists. These individuals may be engaged under either a contract of employment or a contract for services. There are a number of standard contracts which are issued in the industry including the Musicians Union and the British Actors’ Equity Association.
Research grants or fellowships
Research awards or fellowships are sometimes offered to qualified individuals who have normally completed their post-graduate training, to enable them to undertake a specific research project over a fixed period. As there is usually no question of full-time instruction, the scholarship exemption under Section 776 does not apply.
Whether there is a charge to tax for the payments that are made will depend on the particular facts. Firstly, it is advisable to check whether there is a contract of any kind. There is unlikely to be a contract of employment but, there may be a contract to provide services, for example, to research a particular project in return for a fee. The liability would, therefore, be under the Miscellaneous Income rules.
Employment status may be an issue for researchers both for tax and for employment rights. It is important to get a clear understanding of the nature of the researcher’s relationship with the host university as the first step towards deciding on liability to income tax and NICs.
Research awards from the EU
Awards to researchers by the European Union, contrary to popular belief, are not exempt from income tax in the UK. There is no wholesale exemption and each case must be taken on its facts. Researchers may fall into one of the following categories:
- Students - in receipt of scholarship or similar income (see scholarships above).
- Employees - in receipt of salary or wages from the university that employs them.
- Self-employed professionals.
It is possible that the income may be mixed in nature, an example would be post graduate students in receipt of scholarship payments who are also employed on a part-time by the university to supervise undergraduates, give lectures or assist on research projects.
You should consider the employment status using the process.
It may be necessary to separate out elements of payments that come from different sources within the university as some may be earnings for PAYE purposes and some may not.
A true honorarium is generally a payment received by an office holder. It may only be a token payment rather than a commercial fee, but it is clearly a payment which results from holding the office. Such payments are earnings for the purposes of section 3(1) SSCBA 1992 and will be liable for Class 1 NICs.
Employers may sometimes give ex gratia payments, similar to honoraria, to employees to recognise the fact that they have been involved in certain activities not arising from their employment, and that, in relation to those activities, they will not receive any other form of reward. There will be a liability for Class 1 NICs in these circumstances because the payment will derive from the employment and will therefore be earnings for the purposes of NICs.
Likely to be put through the payroll.
Simulated patients are individuals, usually volunteers or actors, who are used to ‘act’ as patients for the purposes of training, assessment or examinations.
If an actor is used as a simulated patient, you should follow the same rules as the Performance Actors above. In general, the simulated patient will be self-employed if they are engaged direct by the university. If the actor is engaged through an agency, the agency rules in s.44 Income Tax (Earnings and Pensions) Act 2003 may apply. Equally, the actor may be deemed an ‘excluded service’, which means that the agency rules would not apply, and they can be treated as self-employed.
For simulated patients who are volunteers, they will not ordinarily be paid for their services, but they may have their expenses reimbursed or be given a nominal sum to cover expenses. See Research Volunteer below for more guidance.
As long as the individual is only paid a small sum to cover out of pocket expenses and compensation for time spent, HMRC agree there will be no tax or NICs liability arising on the individual. This is with the proviso that the sums do no more than reimburse the individual’s reasonable costs of participating in the trial or research, including costs of travel and subsistence.
Should the sum exceed reasonable expenses, HMRC reserve the right to treat the chargeable tax to Miscellaneous Income. This potentially gives rise to a personal tax liability of the individual which should be notified to HMRC under self-assessment.
There is no recommended or set amount for what constitutes “reasonable expenses”.
Some of the volunteers may be members of staff of the university, but their participation in the research is not part of their duties of employment and they do it in their own time and are under no obligation to take part and are threfore likely to be off payroll.
A visiting academic is ordinarily someone who has a contract of employment with another university in a distinguished position and will be at the visiting university for a limited time and will be returning to their own institution upon completion of the visit.
Usually, the visiting academic will be in receipt of a grant which is distributed by the university. How the grant is distributed will determine the correct tax treatment. The grant could be distributed as a reimbursement for receipted expenses and this is generally allowable. If the grant is distributed for a payment of additional fees or as a lump sum, for example, the university will need to establish the employment status of the payee, but it is likely to go through the payroll.
If the visiting academic is from overseas, it would be unwise to make a lump sum payment without authority from HMRC and proof of a Double Taxation Agreement.
The definition of consultant here includes any individual supplying their services through a limited company, also known as a personal service company or PSC or through a partnership. This definition excludes a self-employed consultant, which will be dealt with separately.
As of April 2017, the public sector has to operate the off-payroll in the public sector rules. These rules mean that the university has to assess the employment status of the PSC for tax purposes. The university will need to consider the factors used to establish whether a PSC is employed or self employed and the process for engaging these workers should be followed.
If the proof-reading or editing is being outsourced to an individual or specialist company on an ad-hoc basis, it is likely that it will be off-payroll.
If the translation is being outsourced to an individual or specialist company on an ad hoc basis, it is likely that it will be off-payroll.