CONTRACTING AND TEMP WORKER FAQs
Find out more about temping and contracting through Hays.
To speak to a member of our team, please contact us on 0203 727 2977.
Temporary and Contractor Worker FAQs Contents:
- Contracting & Temporary worker
- National Insurance & Taxs
- Limited companies, VAT and CIS
- Self-billing and contracting through Hays
Contracting & Temporary worker
The flexibility, choice and variety of experience that can be achieved by fulfilling contract, temporary or interim positions mean that this is an increasingly popular career choice for many professionals.
The skills that professional contractors and temps can offer is highly valued by a wealth of organisations, many of which view the engagement of short-term expertise as a key element of their recruitment strategy.
We are the experts when it comes to finding the ideal assignment for both individuals and organisations. We make nearly 40,000 such placements every week and have more links with national and local employers than any other specialist recruitment business.
Whether you are currently working on an assignment through Hays or are looking for your next temporary role, find what you need here. Or contact our dedicated call centre at 0203 727 2977.
Temporary workers online management portal
National Insurance & Tax
Below is all the information you need to know about tax and national insurance for workers who temp or contract through Hays.
Do you have a P45 for the current tax year?
- If the answer is yes, your original P45 parts 2 & 3 must be sent to our Shared Service Centre. If you fail to do this, you may be overtaxed. Please remember to retain part 1a for your records, and note that we cannot accept a fax, copy or Part 1a of a P45.
- If the answer is no, you must complete a form P46 and sign the declaration where applicable. Send form P46 to our Shared Service Centre. If you fail to do this, you may be taxed incorrectly.
Please send your tax forms to:
Hays Specialist Recruitment
40-44 Coombe Road
Once received, the information on the P45 or P46 will be applied on our system and the form sent to the Inland Revenue to enable them to calculate the correct tax code and send us a notification of coding (P6).
It can take between 2-10 weeks for the Inland Revenue to notify us, and we cannot use a P2 form issued to the candidate or a P6 issued by a tax office other than our own.
When we receive the P6 we will amend the tax code. The next time a payment is made, any adjustments (rebates or claw-backs) will be generated.
Once your employment with Hays has come to an end and you have received payment for your last timesheet, you will need to request your P45 either via your Hays Connect portal or via your consultant. P45 requests are processed on a twice weekly basis, so your P45 should reach you within 7 working days of your request being received and any outstanding holiday pay will be paid to you.
Are you a student worker?
If you are a student in full time education within the UK or the EU, you can work during student holidays but will still have to pay tax. You will need to provide us with a P46 form.
HM Revenue and Customs have now withdrawn the use of form P38(s).
If you are a student in full time education outside of the UK and EU, you will need to complete a P46 form and pay tax at the standard PAYE rates. You should then contact HM Revenue Customs to reclaim any tax paid upon leaving employment through Hays.
Tax Office Details and Reference
HM Revenue and Customs Chapel Wharf Area
Trinity Bridge House
2 Dearman’s Place
Manchester M3 5BB
Tel: 0300 2003300
If you don't have a National Insurance number you should contact your local office of the Department of Work and Pensions (DWP), which you will find listed in the telephone directory.
If you didn't supply us with your National Insurance number at the time you registered, please provide your consultant with this.
If you are exempt from National Insurance, please ensure that you provide your consultant with evidence that you are of State Pension Age. We will then automatically set up Age Exemption while you are working through Hays.
If any deductions have already been made during the current tax year, we will automatically refund these on receipt of evidence of State Pension Age. Refunds for previous tax years will need to be claimed via HM Revenue and Customs.
If you earn between £111.00 and £153.00 per week, no NI deductions are made but for benefit purposes, you are considered to have made contributions (Lower Earnings Limit). The Earnings Threshold for tax year 2014/2015 is £153.00 per week. If you earn between £153.01 and £805.00 per week, Class 1 contributions are deducted.
The Upper Earnings Limit for tax year 2014/2015 is £805.00 per week. Employee contributions are only deducted at 12% from earnings between £159.01 and £805.00 per week. Any earnings above this are subject to contributions at 2%. Employee contributions are shown on your payslip as NI EE’s if applicable.
Employers contributions are payable at 13.8% on all earnings above £153.00. These contributions are shown on your payslip as NI ER’s if applicable.
Tax Codes The numbers in the tax code are used to work out the amount of tax-free earnings you are entitled to in the tax year. For example 1000L = allowance of £10,000. The letters show how it should be adjusted following any changes in the Budget.
0T = Indicates that we have not received any from of tax documentation, and tax will be deducted at 20%, 40% or 45% depending on the amount of your weekly earnings.
BR = Indicates that tax will be deducted at the Basic Rate (20%) with no tax free allowances.
NT = Indicates that no tax is to be deducted (Students).
DO = Liable at higher rate tax 40% and 45% where applicable. L = Basic Personal Allowance.
The level of earnings at which income tax becomes payable is £192.00 per week.
Rates Basic rate: 20% up to £31,865 (£612 per week)
Higher rate: 40% from over £31,866 to £150,000 (£612 to £2884 per week)
Additional rate: 45% over £150,001 (£2884 per week)
This is how PAYE is normally calculated. An employee's previous pay and tax figures in that tax year are taken into account to calculate the correct deductions. Any deductions or refunds will automatically be made throughout the year so a tax rebate will not be necessary.
Week One Basis: Deductions are calculated as though it is the first week of the tax year, as we do not take into account previous pay or tax details. It is a temporary tax code and is used if we do not receive a P45. This is also known as emergency tax, an example being 1000L WK1. Please note that if a week 1 tax code is applied, you will not be entitled to any refunds unless we receive a P6 from HM Revenue and Customs, or a P45 on a cumulative basis, and no Year To Date figures will be carried over.
Limited companies, VAT and CIS
If you are offering your services via a Limited Company:
You must have in your possession a countersigned Terms of Assignment of Consultants via a Limited Company Contractor and Self Billing Agreement (PSCToA), and at the beginning of your first assignment with Hays, the Accounts Department must receive:
- A copy of the VAT registration certificate (if applicable)
- A signed BACS form – the bank account must be in the name of the Limited Company
- Hays can only pay through Limited Companies that are registered in the UK and have UK bank accounts
- Hays cannot pay overseas Limited Companies, nor can they send money to a UK company through an overseas bank account. This is not a legal requirement, but is a strict company policy
- From 20 June 2009, Hays will be operating self-bill as standard for ALL Limited Companies. Read our self-bill FAQs.
Notes: UK = England, Northern Ireland, Scotland and Wales. For VAT purposes only, the Isle of Man is considered to be a part of the UK
If you or your company need to be paid through CIS you must provide us with a UTR / CTR number at the beginning of your first assignment. Hays will then verify this number with HMRC.
Self-billing and contracting through Hays
Everything you need to know about self-billing and how it works with Hays.
To speak to a member of our team, please contact us on 0203 727 2977.
What is self-billing?
Self-billing is an arrangement between a contractor (Supplier) and Hays (The Customer) whereby Hays prepares a contractor’s (supplier’s) invoice and sends it to the contractor (supplier) with payment. It means your Limited Company will no longer need to send an invoice to Hays’ Accounts Department along with your timesheet. You submit the timesheet and Hays sends you an invoice along with payment. Basically, it’s a more efficient payment process for contractors and Hays.
Self-billing has been operating for a number of years. It started with the automotive companies and is now widespread throughout industrial and service companies. Most of the large recruitment companies use self-billing.
What’s the benefit to me?
Self-billing is more efficient:
- You don’t have to produce an invoice
- It speeds up payment process and you get your money more quickly
- It reduces your administration
What are the benefits to Hays?
Self-billing benefits Hays as well as it reduces queries and we don't need to check invoices to timesheet.
Who makes the rules?
The scheme has no impact on the IR35 consideration. The rules are set out in VAT Notice 700/62. You can find this on http://www.hmrc.gov.uk/index.htm. Search ‘self-bill’.
Does self-billing impact on my IR35 position?
No, self-billing has no impact on your contractual or commercial arrangements between Hays and your Limited Company and has no impact on IR35 considerations.
Who designed the invoice format and layout?
The invoice format is a standard format that conforms to HMRC regulations and this cannot be changed.
How are the invoices numbered?
On creation of a contractor record, the contractor’s reference number (7 digits) is interfaced to the self-bill number reference and the numeric 00 is added to form a unique 9 digit number, which on production of a self-bill invoice increments by one. For example, for worker 1234567, the first invoice number will be 123456700, the next invoice will be 123456701 and so on.
When do the invoice numbers reset?
They do not reset. Each invoice number increments by 1 for each invoice produced
Can anyone use self-bill?
Self-bill is only used for contractors working through a Limited Company. It’s not relevant if you are a PAYE worker or student.
My self-bill Invoice is incorrect. Who do I contact?
It is unlikely that your self-bill invoice is incorrect as it is taken from the timesheet that you submitted and the client has authorised. However, if you have a query, please contact our call centre on 0203 727 2977.
Is the agreement with me or the Limited Company?
The agreement is between the Limited Company and Hays Specialist Recruitment Ltd.
The company has changed its VAT registration number. What do I need to do?
You need to send us a copy of the new Vat certificate and to contact your Hays consultant to sign a new PSCTOA agreement. Hays will supply your Limited Company with a new self-billing agreement with the new VAT registration number, which needs to be signed by an authorised representative and returned to Hays.
The Limited Company has changed its name. What do I need to do?
If the Company has changed its name BUT maintained the same VAT number, send us a copy of the change of name certificate issued by the Registrar of Companies. Please email this to firstname.lastname@example.org, quoting your name, date of birth and the old company name. You will also need to contact your Hays consultant to sign a new PSCTOA agreement form.
My system is set up to provide invoices. How will I cope with self-bill invoices?
Instead of providing your own invoices, you can use the self-bill invoices as part of your Limited Company’s accounting records. This is accepted by HMRC for VAT purposes. However, we recognise that you may have your own system to provide invoices. If you want to continue to do this, we suggest you produce your invoice but do not send it to us; instead attach it to the self-bill invoice.
I have signed a PSCTOA, but my Limited Company has not been paid this week and has not received an invoice.
Please contact 0203 727 2977 and they will help resolve any problems.
My company has just become VAT registered. Do I need to send Hays a copy of my VAT certificate?
Yes, you will need to send a copy of the new VAT registration document via email to email@example.com. You will also need to contact your Hays Consultant to sign a new PSCTOA agreement.
My company has now deregistered from VAT. What do I need to do?
Please email firstname.lastname@example.org advising the effective date of the change. You will also need to contact your Hays Consultant to sign a new PSCTOA agreement.
When will my self-bill agreement expire?
There is no expiry date. The self-bill agreement will continue until you cease to work through Hays. I don’t want to agree to the self-bill agreement. Can I continue to provide my own invoices on a weekly basis? Self-bill is our standard method and our systems are being changed to reflect this. Self-bill is more efficient, saves time and markedly reduces the possibility of late payment. You are not required to provide your own invoices for Hays to use.