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Casual Worker Payments - Guide for Departments
This guidance is intended to be read by managers and administrators with responsibility for the recruitment of employees and workers. It must be read in conjunction with other advice issued by the HR Division on UCL recruitment procedures and Contracts of Employment and its compliance with statutory legislation. This note is specific to UCL departments who invite individuals to undertake a short term one-off duty (e.g. lecturing on a course) without the requirement to issue a formal contract of employment.
Right to Work in the UK
The Immigration, Asylum and Nationality Act 2006 makes it an offence to employ anyone who does not have permission to be in, or work in, the UK.
The law requires employers to undertake more stringent checks on an employees right to work before they undertake any type of engagement. This includes the engagement of workers for a one-off duty. Failure to knowingly undertake this check is now a criminal offence and would also put UCL at risk of a serious financial penalty. Further guidance is available here.
You will need to ensure you have seen the original documents and kept copies, which must be retained for two years, in case UK Visas and Immigration (UKVI) request such evidence. The UKVI website will also provide valuable information on necessary employer checks.
If the worker is unable to satisfy the documentary proof required by UCL procedures than they cannot be engaged.
There is no employment relationship between UCL and the worker. Any payments made to a worker for a one off duty will be treated as subject to Pay As You Earn (PAYE) and National Insurance contribution (NIC) deductions under Her Majesty's Revenue and Customs (HMRC) legislation. If the worker is undertaking a duty or service that could qualify as self employment and UCL is invoiced for this service, payment should not be made via UCL Payroll Services but via the UCL Finance Division (see later paragraph).
When engaging a worker for a one-off duty the following two documents should be provided to the worker to enable the understanding of the relationship with UCL, the requirements to satisfy 'right to work' legislation and how UCL will make payment to them:
b) Fees and expenses for casual workers (WORD doc)
The Fees and expenses for casual workers form has been designed to enable Departments to collect all the relevant details required to process a Form 7 payment via the Service in Partnership system (SiP). Ideally workers should be asked to complete this form prior to their engagement. Departments may adapt this form or use their own method to capture the required information contained within this form. However, without all of this information UCL Payroll Services will be unable to make payment to the worker and/or ensure any national insurance contributions deducted can be appropriately allocated to the workers record held by HMRC.
The payment for a one-off duty will normally be processed as a Form 7 on SiP and actioned by Payroll. These payments will have the appropriate PAYE and NIC deducted in line with HMRC rules, rates and limits. Unless the worker has submitted a P45 or Starter Declaration or, HMRC have issued a tax coding to UCL, the pay received will be subject what is known as BR tax. This means all pay will be subject to the rate of basic tax (currently 20%) and no personal allowances or ‘free pay’ will be allowed.
UK Bank details are requested because UCL is committed to paying workers and employees by BACs payments which are more secure and timely than cheque payments. Payments can not be made to overseas bank accounts.
HMRC no longer enable employers to submit on their end of year returns any temporary National Insurance numbers (NINOs). This means that where the employer holds no NINO, any PAYE or NIC contributions deducted will not be allocated to the employees NIC, or tax record in a timely manner and may prejudice any state benefits which may become payable at a later date.
HMRC use the number of no NINO or no employee date of birth as an indicative indicator on whether an employer has thorough procedures for collecting important personal data. It is therefore important that in all cases that the workers date of birth (DOB), NINO and gender are ascertained before engagement and without exception before submitting any payment.
UCL wishes to collect equal opportunities data to ensure that external workers are engaged on the basis of merit. Workers must be asked to provide the relevant details which must be treated in the strictest confidence.
There are some instances of engagement where it may fulfil self employed status e.g.undertaking duties that do not form part of the core curriculum or where the Individuals employer is invoicing UCL for the individuals services. Self employed status should not be determined by the worker or the department but in each case you should contact Eleanor Morrissey within the Finance Division for an employment status questionnaire. This form will be assessed by Finance and a decision on whether tax is deductible, or not, will be made. For further details please refer to 'UCL Finance Division Guidance Notes Payments to Self Employed Persons'
Where self employed status is upheld by Finance Division, payment must be processed via Finance and Form 7 should not be submitted via SIPS.
This guide has been issued by:
Head of Payroll and Pension Services
1-19 Torrington Place