IR56 - Employed or self-employed? A guide to employment status for tax and National Insurance contribution.

This information will help you to work out whether you are employed or self-employed.

Introduction

NewcastleCollege needs to decide your correct employment status. It is our responsibility and it is important that we get this right.

If you are employed, NewcastleCollegewill need to deduct tax from your pay (through PAYE) and Class 1 NICs.

If you are self-employed, you are responsible for paying your own tax and NICs.

Just because you are employed or self-employed in one job, it doesn't necessarily mean you will be in another job.

Determining employment status

Employment status is not a matter of choice but follows from the terms and conditions of the employment.

You or the person you work for, cannot simply choose whether you will be an employee or self-employed.

In deciding whether a particular lecturing engagment amounts to employment or self-employment you need to look at the terms, conditions and facts surrounding the engagement.

Visiting Lecturer: A visiting lecturer who gives a one-off talk or short series of talks about which he or she has specialist knolwledge and which is not part of the core curriculum will normally be engaged on rather different terms and conditions and is likely to be self-employed.

Occasional Lecturers;Sometimes lecturers are engaged on a less formal basis to give a series of lectures on a particular topic. Employment status for tax purposes is often the most difficult to decide. In each case it is necessary to consider all the circumstances including the terms and conditions of the engagement.

  • Control: generally the more extensive the control the more indicative it is of employment. For example, a lecturer required to teach in accordance with a set syllabus would be more indicative of employment than a lecturer engaged to talk about a specific subject but was left to determine the content.
  • Who must undertake the work? Can a subsitute be sent? To be able to send a subsitute is a greater indication of self-employment.
  • Equipment: where the lecturer supplies his own equipment (overhead projector, handouts) at his own expense pointstowards self-employment.

How do I work out employment status?

The following questions should help you and NewcastleCollege decide what your correct employment status is. They are only a brief guide and don't cover every situation. Usually it will be easy to decide whether you are employed or self-employed, but there will be times when it will not be so easy. You will need to look at the job as a whole, taking into account all the conditions that you are required to work under. This guide will help you and NewcastleCollegedecide, but it is not possible to cover all scenarios and situations.

Employed or self-employed?

If you can answer 'Yes' to all/most of the following questions, you are probably EMPLOYED:

  • Do you have to do the work yourself?
/ Not necessarily it can be contracted out to others
  • Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
/ No
  • Do you work a set amount of hours?
/ No
  • Can someone move you from task to task?
/ No
  • Are you paid by the hour, week, or month?
/ By Invoice on completion of work.
  • Can you get overtime pay or bonus payment?
/ No

If you can answer 'Yes' to all/most of the following questions, it will usually mean you are SELF EMPLOYED:

  • Can you hire someone to do the work for you or engage helpers at your own expense?
/ Yes
  • Do you risk your own money?
/ Yes
  • Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?
/ Yes
  • Do you agree to do a job for a fixed price regardless of how long the job may take?
/ Yes
  • Can you decide what work to do, how and when to do the work and where to provide the services?
/ Yes
  • Do you regularly work for a number of different people?
/ Yes
  • Do you have to correct unsatisfactory work in your own time and at your own expense?
/ Yes

ARE YOU SELF EMPLOYED? YES

If yes, provide your National Insurance (NI No) number, your HM Revenue & Customs self employed reference number (HMRC No) below and details of your Professional Indemnity Insurance cover if applicable.

NI No: ______

HMRC No: ______

Professional Indemnity Insurance :______

Please confirm that thisHMRC No applies to the goods/services

to be supplied to NewcastleCollege. YESNO

Declaration

I acknowledge that I take full responsibility for any tax and national insurance due to HMRC for any payments received from NewcastleCollege in respect of any work undertaken for them.

I acknowledge that if I am subsequently found to be an employee by HM Revenue & Customs that I agree to indemnify NewcastleCollege against any tax and NI due including interest and penalties incurred.

I accept full liability for my tax and NI and shall indemnify NewcastleCollege against any loss it may sustain arising from my actions.

Signed:______

Name:______

Date:______

Name of Company:______

TO; EMPLOYEE OPERATIONS

1ST FLOOR

SANDYFORD CAMPUS

Visiting/Occasional Lecturers – Payment Form

This form can only be used for payment through the payroll, of visiting/occasional lecturers who give one off, or a short series of talks which do not exceed 15 hours in one academic year i.e. 01/08 – 31/07. All payment will be subject to deductions of tax and NI at the appropriate rate.

TO BE COMPLETED BY VISITING /OCCASIONAL LECTURER

Personal Details

Name
Address
Contact Number
Email address

Bank Information

Name of Bank
Account Name
Sort Code
Account Number
Signature
P46 attached

TO BE COMPLETED BY SCHOOL

Department/School
Start Date
Leave Date
Amount to be paid / £
Cost code/account number
Authorised Name
Authorised Signature

TO BE COMPLETED BY HR

Date Authorised
Month of Payment/Termination (must be same month)
Authorised Signature

TO BE COMPLETED BY PAYROLL

Employee ID number
Pay Group / 52
Pay Location Code / 6033
NI Number
Batch Number
Checked By