Directorate of Finance and Legal Services
To: Finance Administrators Headington Campus Gipsy Lane Oxford OX3 0BP UK
Purchasers t. +44 (0)1865 483736 f. +44 (0)1865 483464
From: Tim Bolton, Deputy Director email@example.com
Date: May 2006
cc: Deans and Directors, Payroll Team, Purchasing Team
Self-employed status confirmation
Establishing the employment status of individuals can be a complex process affected by myriad
personal circumstances. For this reason it is difficult for the University to determine an individual’s
tax status, and we are dependent on assessment by Her Majesty’s Revenue and Customs
(HMRC) to assist. However, HMRC will no longer provide assessments of an individual’s status in
advance of employment or providing a service. Instead, they have provided guidance on
establishing status through their website.
The University is liable for Income Tax and National Insurance (NI) for an individual who is
incorrectly paid without such deductions. It is therefore important that we have evidence that we
are able to legitimately pay for services without deducting tax and NI. From 1 June 2006,
therefore, we will require certain suppliers of services to provide us with a copy of the output from
the HMRC website to confirm that they have been assessed as self-employed if they wish to be
paid without deduction. The appropriate link to the website is as follows:
www.hmrc.gov.uk/calcs/esi.htm, then click on ‘conditions of use’ and accept these (if you’re happy
to). You’ll then be taken through a series of questions, and this will result in an opinion being
given on your employment status. If it confirms that you are self-employed, a copy of this will
need to be supplied to payroll or purchasing departments, preferably by email, in line with the
Currently, there are two main groups of people to whom this can apply:
1) Individuals who are paid through our payroll – i.e. those who are paid using one of our
casual, specialist or hourly-paid lecturer forms who regard themselves as self-employed;
2) Individual suppliers of services who issue us with an invoice (for which a purchase order
should have been raised). These will be from the individual personally, i.e. where
payment is requested to the individual not to a company and where no VAT is included.
Those in category (1) will have tax and NI deducted as a default unless they have provided payroll
with the self-employed status confirmation in advance of the payroll being run.
Those in category (2) will also be paid through the payroll with deduction of tax and NI unless the
School or Directorate have supplied the purchasing manager with the self-employed status
confirmation as described above at the time they are set up as a supplier (i.e. the supplier has
answered ‘yes’ to the question on whether they are self-employed). They will be paid gross
through the Cedar system provided the status form has been received by us.
By instituting these changes, we hope to ensure that suppliers are correctly treated from a tax and
NI perspective and that the University is not rendered liable to assessment of unpaid tax and
possible penalties. We would be grateful if you would pass this information to anyone you deal
with who falls into one of these categories so that they are aware of the reasons for these
requirements. If you, or they, have any further questions, please contact Lorraine Mills (x3739 –
for queries relating to individuals who are to be paid through payroll) or Nigel Bacon (x 3901 – for
queries relating to suppliers paid through Cedar).
Thank you for your assistance in addressing this difficult and complex area.