Consultancy

Any arrangements which are potentially consultancy contracts should be tested against the following criteria and questions. The treatment of the payment will depend upon the responses provided. Determination of employment status under consultancy style contracts is the responsibility of the University, as "engager", and not the individual concerned. It does not follow that an individual who is treated as self-employed by one organization will be self-employed for another as the determining factors are the nature of the work done or services provided on a case-by-case basis rather than a generic classification of "consultant" or "self-employed" - it is not sufficient, therefore, to accept the assurance of the individual themselves, but in each case to make the following assessment.

We recommend that you use the HMRC Employment Status Service (ESS) Tool to verify the employment status of individuals engaged under a consultancy agreement so that the payment terms are clear to the worker as well as the engager before the work starts. The same tool must be used to verify the status of individuals engaged via a Personal Service Company or Agency.

1. The consultancy test

Answer YES or NO to each of the following questions given under four key headings.

(a) Control and Duties:
1. Is the individual expected to define what work is required to be done and how as part of the contract?
2. Is the individual expected to work without having priorities set by or without regular direction or supervision from other staff employed by the University?
3. Is the contract free from any requirement or expectation to manage other University staff as part of the work undertaken?
(If there is a requirement to manage other University staff then answer "NO" to this question).
4. Are the duties or the role performed by the individual unique when compared against other jobs within the University?
(If there are similar roles being performed by employed staff then answer "NO" to this question).
5. Is termination of the contract dependent upon completion of the work and / or breach of contract?
(If termination is dependent upon giving a notice period then answer "NO" to this question).

(b) Substitution:
6. Does the individual have the freedom to specify whether they carry out the work in person - i.e. can the individual specify or hire an alternate worker if they choose to do so?
7. In the event of illness or unavailability, is the individual expected to be able to supply a substitute worker to carry out the duties of the contract?

(c) Equipment:
8. Is the individual expected to provide their own equipment or materials (where required) with which to work or perform the duties of the contract?
9. Can the duties of the contract be performed by the individual "off-site" - i.e. away from University premises - whether or not this is particularly specified in the contract?

(d) Risk:
10. Is the individual expected to bear running costs associated with the work, even if such costs are subsequently recharged?
11. Is the contract fee charged on a fixed-price basis either for the whole job, or for specific stages?
(If a rate is paid - hourly, weekly, monthly, etc then answer NO to this question)
12. Is the individual expected or required to provide their own insurance indemnity cover as part of the contract?

2. Determining status

(i) Majority of responses are a YES (including at least one YES under each separate heading)
The contract may be treated as a 'Consultancy Contract' for tax and payroll purposes.
Provide the details to Payroll specified in section 5.1 of the Payments Manual and pay via Oracle Financials on production of a valid invoice from the consultant concerned. Refer to the Purchase to Pay process for further guidance.

(ii) Majority of responses are NO (or one or more of the separate headings does not have a single YES response)
The contract must be paid for tax purposes via the University Payroll. Please refer to Personnel Services guidance to determine employment status

(iii) If, having completed the test, there remains any doubt over consultancy status, then the contract should be referred to the Payroll Team for determination.

Contact Details

For further information, please contact:
Payroll Team (University access only)
Telephone: 01865 (6) 16145

Contact Details

For further information, please contact:
Payments Team
Telephone: 01865 - (6) 16016 or (6) 16103