IR35 FAQs

IR35 (off-payroll workers) information for schools

Frequently Asked Questions

Do I have to consider IR35 for all school employees? 

No - employees are paid via your payroll and therefore are unaffected by this legislation. IR35 only comes into consideration if you are engaging workers off-payroll and they provide services via an ‘intermediary’ which can either be direct or through an agency.

Which workers will be affected by the reforms?

Workers who provide their services to your school through an intermediary, which can be the worker’s own limited company, such as a personal service company (PSC), a partnership of which the worker is a partner, or another individual.

How will the reforms affect schools?

Public bodies including schools, academies and multi academy trusts will be affected when they engage a worker via an intermediary, for example a PSC, third partner agency or partnership. In cases where the rules apply, schools will have statutory responsibility for deduction and payment of tax/employee National Insurance Contributions (NIC’s) and for payment of employer’s NIC.

What happens if a worker is employed through an agency such as supply teachers?

Agency supply teachers covering for the absence of permanent staff or fixed-term staff should be paid as employees of the agency, meaning the agency pays the worker but with PAYE Tax and NI deducted via the agency’s payroll. Schools / academies will need to get assurance in writing from the agency that they are doing this for all current and future supply teachers that they provide to your educational establishment.

How will schools determine whether the rules apply?

An online tool, known as the Employment Status Service (ESS) is available by HMRC.

Does working part-time affect a worker’s IR35 status?

No.

If a worker says they are self-employed can it be assumed they are outside IR35?

They still must have an IR35 employment status check on their work to determine if they are in scope of IR35. If they are assessed as in scope they must have PAYE tax/NI deducted from their payments.

What will happen if the new rules apply?

The school will need to deduct tax and NIC through payroll from the amount remaining after VAT is deducted. Tax, employee and employer NICs will be paid to HMRC by the school’s payroll provider. If your school uses the One Education payroll service, you will be able to ask us to set up the worker on a payroll to ensure the right deductions are made. Where your payroll provision is not via One Education you will need to liaise with your payroll provider to establish the process they intend to put in place to manage these changes in legislation.

For workers who are assessed as inside IR35, who pays over the PAYE tax and NI to HMRC?

This should be included with all other PAYE Tax/NI being paid over monthly to HMRC by your payroll provider, or by the agency’s company payroll provider if the worker is paid via their payroll.

Should a contract be issued for each off-payroll worker that is engaged?

If the worker has been engaged via an agency, it is the agency’s legal responsibility to issue the contract for the worker. In this situation your school / academy will have a separate ‘supplies’ contract (service agreement) with the agency to supply one or more workers. If the worker has been engaged directly by your school/academy you must issue a contract of engagement. The contract terms must be consistent with the information used for the IR35 assessment.

Do workers have ‘employment rights’ if they are inside IR35?

No, the legislation states that any worker who is assessed as inside IR35 but engaged via an intermediary will have no entitlement to employment rights and no entitlement to statutory payments or benefits associated with employment (sick pay, redundancy, eligibility to join the pension scheme).


For more information on our HR support, enquire online or call Rachel Foster on 0844 967 1112.  

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