FAQ's - Manager

What are the consequences of getting this wrong?

HMRC will impose penalties and fines where correct procedure has not been followed and due care and consideration has not been followed. All costs relating to penalties and fines will be directly charged to the department responsible for the engagement.

Before contracting out teaching to individuals who are not employed by the University, Colleges should ensure there is evidence of the competence of the provider to teach to the required standard. This can be assessed through one or more of the following:

  • interview (interviews should be undertaken by at least two members of staff who are responsible for the module/programme)
  • references from other HEIs
  • student feedback and/or peer observation (where the provider has been used previously by the University)
  • CV showing qualifications and teaching assignments undertaken elsewhere.

Yes modules taught by self-employed providers should be subject to the same student evaluation procedures and peer observation as other programmes/modules and the outcomes of such reviews, together with any relevant comments made by external examiners and/or examination boards, should be taken into account before any further work is offered to them.

Members of staff should not be directly involved in decision-making in cases where work is offered to their former colleagues, close friends or family of staff. Where this is not possible, because they have lead responsibility for the module/programme, they should ensure that senior staff are involved in the decision-making progress.

While it is recognised that the specialist nature of such teaching assignments will (in most cases) prevent Colleges from seeking quotations from more than one supplier, Colleges should consider other methods of assessing that the arrangement is 'best value'. For example:

  • Is the rate for the work commensurate with the rate that would be paid to an occasional teacher or a contracted member of staff?
  • What evidence is there that a market premium is justified?
  • What negotiation has taken place with the provider about price before the contract is agreed?

It is very unlikely that HMRC will accept that an individual who is employed by the University can also act as a self-employed consultant supplying services to the University. In most cases, where such additional work is approved (see procedure for payment to academic staff for additional teaching) any additional payment will be paid through payroll and be subject to statutory deduction. 

If you do want to contract an employee at the University on a self-employed basis then approval must be given by the HR Director as well as the Head of the College/Service within which they are employed.  This is to ensure that there are no conflicts of interest or health and safety implications.

Yes if the supplier is providing services and some materials then they could be affected by the legislation and an HMRC assessment is required.

No. If the supplier is only or predominantly providing goods then an HMRC assessment is not required.

Yes.  If you have never engaged the services of a particular supplier then you will be required to undertake an employment status check before you engage with them. How you engage with the supplier may be different from how they interact with another department.

Yes. The outcome of the Employment Status assessment should be notified to the supplier. The HMRC questionnaire must be completed by the individual who understands the day to day working relationship. In some instances this can provide a useful mechanism to resolve any points of clarity particularly where the outcome is deemed to be ‘Undetermined’. The prospective Supplier does have the right to challenge our assessment and f they request to have a copy of the questionnaire this must be provided within 31 days (or there is a fine).

Save it and send it to Temporary Resourcing Unit along with the TR2 Form

Suppliers should be aware of this legislation and whether it applies to them via their Accountant.  The supplier can also check their status on the HMRC website.  Any suppliers that are deemed to be PSC’s and the legislation does not apply e.g. treated as self-employed, will need to receive a Purchase Order from the University and submit their invoices which will be paid net of tax and National Insurance liability.

Three steps are to be undertaken;

  • View Finance webpages
  • Indicate if the supplier is a personal service company from the HMRC questionnaire in the notes field on the Supplier Set Up form
  • The supplier/ worker will be set up on T1 and you will be notified when this is done

The University is legally obligated to deduct tax & national insurance (NI) in line with policies set by HMRC. The individual has the right to accept or decline the offer of work under the terms specified.

Yes the process is the same for UK and Overseas workers they will need to be set up as suppliers to the University, receive a Purchase Order and submit an invoice for payment on completion of the work or at the agreed billing stages.

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