Engaging self-employed and consultancy work

  • Background

    Human Resources give the following advice and instruction on engagement of self-employed persons. This is to protect the University from any potential liabilities to assessment of unpaid tax and possible penalties; it is also to ensure documented agreements are entered into appropriately.

    Pre-requisites to use for someone on a self-employed status

    If engaging someone on a self-employed basis then it is a compulsory University requirement that a formal contractual consultancy agreement be entered into, documented in full and signed by both parties before commencement of the work required. Furthermore the person to be engaged must have demonstrated their self employed status before any business relationship can commence (i.e. even before contracts have been signed). This status is most likely where a self-employed supplier has a multiplicity of roles for several customers, not just the University. Where the supplier provides a service for the University alone and does not supply anyone else then extra diligence should be exercised in confirming self-employed status from the onset; this is the responsibility of the manager engaging the supplier.

    The University consultancy contract and consultancy-in check list for submission for signing has been drawn up to reinforce this and any wish to deviate from its content must be agreed in advance by the Legal Department. Faculties and Directorates need to note that this contract does not guarantee self-employed status entire of itself – in the eyes of the Inland Revenue or employment law and that individual cases can be discussed with Human Resources.

    Appropriateness of a consultancy contract

    Examples of where a consultancy contract would be appropriate are to use a consultant to deliver a series of specialist lectures or perhaps cover an aspect of a project where someone else is off sick or away for some other reason. So, where the University is merely buying extra capacity to perform standard University-funded functions for a short period of time (up to one year) and for a small value (up to £10k – although it would be prudent to check with central finance).

    Please note
     multiple contracts must not be used with the same person – (e.g. firm XYZ Ltd can't have a project broken down into 5 segments each for £10k with a total liability of £50k to the University).

    Consultancy contracts should not be used instead of an employment contract or associate lecturer arrangement without prior discussions with the HR Directorate and should not be used where the University is effectively sub-contracting work that is funded under a research grant or some other grant (this is because the University will need other conditions to ensure that the contractor does not put the University in breach of its contract with the funder). Consultancy contracts also should not be used where the University is providing consultancy services to a third party.

    If engaging someone on a consultancy contract proper records must be kept of  correspondence with the consultant and also a copy of the contract signed by both parties. This is very important in cases there is a dispute with the consultant at a later date.

    Please note
     that these agreements must be signed by the Registrar on behalf of the University. Please print off and complete this consultancy-in check list and present it along with the contract to the Registrar.

    Supplier appraisal form