Off Payroll Working: Common roles

This process has been developed as a tool to help simplify the decision process to determine the appropriate employment status for certain roles which are common throughout the higher education sector or within our University.

This approach also aims to minimise the administration for departments with repeating roles, where the outcome of the employment status determination (CEST) will be the same for any individual undertaking that role; the employment status determination of the role will not change by worker.

IMPORTANT

For ongoing compliance, the University will review these common role arrangements annually to ensure that the employment status determinations remain valid for tax purposes.

As employment relationships may change over time, it is essential that engaging managers contact the Off Payroll Working (IR35) team if the arrangements of the work changes, particularly when workers have been engaged regularly in the same role, to enable the employment status to be reviewed to ensure it is still appropriate for both tax and employment rights purposes.

Common roles

What is a “common role”

A "common role" is a role where the essential service requirements will not change irrespective of the worker engaged to carry them out. The role description will be the same for every worker undertaking the role, with the same relationship with the University, irrespective of the individual worker.

A "common role" can be identified as a role which:

  • Is undertaken regularly, in your department or throughout the University;
  • Has the same requirements each time you need the service;
  • Is managed in the same way i.e. the arrangements made between the University (your department) and the worker (the individual you engage to carry out the role) in relation to how the work is undertaken;

If you have a role which meets this criteria, then you may create a "common role" for use by your department.

In some cases, “common roles” can be created for use across the University.

Examples of University wide common roles are:

  • Career Coaches;
  • Video/Film Producer;
  • Transcription or Translation Services.

Within these common roles, the individuals engaged are likely to have different skills or specialisms because of the nature of the work itself.

For example a career coach will be engaged for an individual member of staff at a point in their career. They may need to have experience of the area of work or the challenges faced at a senior level in an organisation.

What does not change is the role description for the coaching service itself.

Process flowchart

Off payroll working (IR35) common roles process flowchart

The flowchart below shows the Off Payroll Working (IR35) common roles process, detailing the steps undertaken by the engaging manager and the central Off Payroll Working (IR35) team.

A PDF version of the flowchart is available here.

Common roles process PNG

Creating a new common role

Creating a new common role

When you identify a new common role, where a standard employment status determination (CEST) has not yet been created (not on the common roles list), it is necessary for the University to create the documents required for audit and HMRC compliance purposes. This includes a clearly defined role description and an accurately determined employment status (CEST) outcome, which can then be used, with confidence, for each new worker engaged for that role.

The steps for creating a new common role are as follows:

Step 1: Create a full role description for the common role

When you have identified a role which is undertaken regularly by different individuals, you will need to create a full role description for this work.

This description will be used to ensure that any new worker(s) engaged into the common role are undertaking the same role, which will enable the predetermined employment status (CEST) to be used.

Step 2: Complete one full questionnaire (ESQ1 or ESQ2)

To set up a new common role, it is necessary to have a detailed understanding about the arrangements of work to be able to accurately complete the employment status determination (CEST) for compliance. You will only be required to complete this questionnaire once as part of setting up the new common role.

To complete the questionnaire (ESQ1 or ESQ2), we suggest that you identify a worker already in this role and complete the questionnaire for them; it is easier to answer the questions about the management of a role with an individual worker in mind.

Download ESQ1: For services NOT provided through an intermediary (PSC or Agency)

Download ESQ2: For services provided through an intermediary (PSC or Agency)

Please note: It does not matter if the worker you have identified is engaged through an intermediary or is an individual, as it is the role we are assessing, not the engagement route, and you will complete the same set of questions whether you use ESQ1 (individual) or ESQ2 (where there is a company / agent involved).

Completing the questionnaire

  • Please complete the FULL questionnaire.
  • DO NOT take the offered shortcut on ESQ1 to use HMRC's CEST tool; we need the full details to establish a common role outcome.
  • Please add as much detail as possible in the “explain you answer” boxes below the questions, this will help us be clear on the role.
  • If you have any documents that you use to advertise a role, please provide these when you submit the questionnaire to IR35@sheffield.ac.uk.
  • When submitting your questionnaire, please make it clear that the submission of the questionnaire is for the purposes of setting up a new common role.

For further guidance on completing the Employment Status Questionnaire click here.

Step 3: Employment status determined

The Off Payroll Working (IR35) team will undertake the status determination for the role to confirm if this is an employment type role (on payroll) or a self-employed / contractor role (off payroll via the vendor route).

The team will confirm the employment status determination with the engaging manager before finalising the new common role.

Step 4: Common role created

The common role now has a standard employment status determination (CEST) and the role will be assign a common role code and then added to the University’s list of common roles ready for future engagements (see Engaging workers into an established common role).

Please Note: A common role code is created once the standard CEST has been completed by the Off Payroll Working (IR35) team and should not be confused with the CEST reference number required to set the worker up as a vendor.   Every individual worker, including those undertaking a common role, will require a unique CEST reference number to proceed with the vendor set up.

New workers

Engaging new workers into an established common role

When a common role and standard employment status determination (CEST) has been created, these will be added to the University’s common roles list and assigned a unique common role code.

Please Note: A common role code is created once the standard CEST has been completed by the Off Payroll Working (IR35) team and should not be confused with the CEST reference number required to set the worker up as a vendor. Every individual worker, including those undertaking a common role, will require a unique CEST reference number to proceed with the vendor set up.

Check the common roles list

When you are seeking to engage a new worker into a common role, you will need to refer to the common roles list.

If the common role is on the list, this role will have been assigned a common role code which confirms that a standard CEST has been completed and you may follow the procedure below.

If the common role is not on the list, a new common role will need to be created (see Creating a new common role).

To ensure our compliance, please follow these steps when using common roles with a standard CEST:

Step 1: Complete the ESQ3 questionnaire

The ESQ3 is a simplified questionnaire to be used for a new worker, or multiple new workers, who will be engaged to undertake a common role.  For efficiency, this questionnaire is a spreadsheet to enable engaging managers to complete a row for EACH worker using the common role.  Please complete a separate ESQ3 for each common role.

Download ESQ3: For workers engaged to undertake a common role

Please complete the FULL questionnaire (guidance on completing the questionnaire is provided on the first tab of the spreadsheet).

  • Ensuring worker details are provided for EACH worker, as these are required for our records and in later stages for payment to be made.
  • Use the common role description (see common roles list) to ensure that the role is the same for EACH worker.
  • Complete the declaration, confirming that all workers roles match the common role description.
  • Once completed, please submit the ESQ3 to IR35@sheffield.ac.uk for processing.
Step 2: CEST reference number(s) confirmed

The Off Payroll Working (IR35) team will process the questionnaire and will provide the engaging manager with a unique CEST reference number (required for vendor set up) for EACH worker.

Step 3: Regular review

As employment relationships may change over time, it is essential that engaging managers contact the Off Payroll Working (IR35) team if the arrangements of the work changes, particularly when workers have been engaged regularly in the same role, to enable the employment status to be reviewed to ensure it is still appropriate for both tax and employment rights purposes.

IMPORTANT

The HMRC requires employers to carry out the Off Payroll Working checks for all worker engagements and to consider whether the IR35 regulations apply where the engagement involves an intermediary (typically a Personal Service Company or an Agency).

Therefore, the Off Payroll Working (IR35) team is required to keep a record of each individual engaged Off Payroll and document the status determination that we have carried out. This must be done for each worker, even if the role they are undertaking is the same one as previously assessed and even if it is a common role, where we have predetermined the status outcome.

Existing workers

Existing workers engaged in a common role

If you have workers that you have already engaged in a role that you have asked the Off Payroll Working (IR35) Team to assess as a common role, you can send a list to the team to obtain the unique CEST reference for these workers. This will ensure you have the references available should you be asked to provide it as part of the payment process.

Once the common role has been assessed and a common role code assigned by the Off Payroll Working (IR35) Team, please use the ESQ3 spreadsheet to record the details of each worker in the common role and send this to the team.

The team will then provide a unique CEST reference number to each worker.

We are still developing these webpages and would welcome any feedback to improve our guidance for those using the Off Payroll Working (IR35) procedures. Please share any suggestions with the team on IR35@sheffield.ac.uk.