Introduction
Health Education England has a legal obligation to ensure all payments we make to an individual for a service are checked, and all payees have either a UTR number/VAT registration number, or a payroll system is used. This places the responsibility on the individual to declare their earnings and pay the appropriate amount of tax and NI (as applicable to the individual).
As a consequence, our payments and invoicing process have changed and we are obliged to comply with IR35 regulations within the Intermediaries Legislation (2000) as part of the Finance Act (updated 2019)
The HMRC assessment should be completed for any person who is submitting an invoice for payment for a service, e.g. teaching/workshops/facilitators/speakers/trainers etc.
Typically, these people are NOT:
- on the payroll
- seconded to Health Education England under a formal agreement
- employed via a government framework agency
In addition, the IR35 provision also covers payments made to suppliers, using a personal limited company. This may include;
- Actors or role players
Purpose:
IR35 is a tax legislation designed to combat tax avoidance by individuals supplying their services to clients on a self-employed basis or via an intermediary.
What we (Health Education England) have to do:
Fundamentally IR35 involves applying 3 principles:
- Control: what degree of control does the client have over what, how, when and where the work is carried out.
- Substitute: is a personal service required by the “worker”, or can the “worker” substitute in their place.
- Mutuality of Obligation: a concept where (the employer is obliged to offer work and the worker is obliged to accept it.
We carry out these principles by undertaking an assessment designed by HMRC. If through the assessment it is found that the individual is not defined as an employee of Health Education England then we will require either a UTR or VAT registration number from the individual wishing for payment from Health Education England.
What is a Unique Tax References (UTR)
A UTR is a unique tax reference which comprises of a 10-digit number that HMRC issue when registering for self-employment. A UTR does no compromise one’s status with an employer but means they need to declare their earnings at the end of the tax year separately.
Logging into a Government Gateway Account is the simplest way to find it online. Once logged in the UTR can be found within the self-assessment section or in the top right hand corner of an account summary. It can be found on any correspondence from HMRC such as – HMRC Tax return, HMRC statement of account, payment reminders or the SA250 which is a letter issued when someone first registers. The HMRC can be contacted on 0300 200 3310. They will require the individual to go through identity checks and it can take up to 7 days for a copy of a UTR to be received in the post – they will not disclose it over the telephone.
If an individual has not been issued with a UTR they will be required to arrange for this as soon as possible so we can continue to use their services.
Useful information: -
HMRC Guidance -https://www.gov.uk/guidance/off-payroll-working-in-the-public-sector-reform-of-intermediaries-legislation
HMRC toolkit -https://www.gov.uk/guidance/check-employment-status-for-tax
Applying for a UTR - https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed