registering with Payroll Village

In order for you to be paid by us, we will require our registration form and self-employed declaration to be completed and sent back along with Eligibility to Work in the UK documents (e.g. copy of passport). You will also need to sign our contract for services, this is not an employment contract and means you don't legally have to do the work yourself. You can send someone in your place; you would get paid and it would be up to you to pay the person you sent to site.

We, like any other contractor, are obliged to 'verify' any new worker with HMRC before their first payment. However, if you are waiting on your UTR number arriving before your first payment, your tax deduction status will be 30% (Higher rate) until your records are matched up. Any difference in payments made at the higher rate are then reimbursed at the end of the tax year by the Inland Revenue.

Identification

Subcontractors must give contractors their name, unique taxpayer reference and national insurance number (or company registration number) when they enter into a contract. So long as the contractor is satisfied that the subcontractor is genuinely self-employed

Verification

The contractor has to contact HMRC to check whether to pay a subcontractor gross or net. Not every subcontractor will need verifying (see below). Usually it will only be new enrolments.

The verification procedure will establish which of the following payment options apply:

  • gross payment
  • a standard rate deduction of 20%
  • a deduction made at the higher rate of 30% if the subcontractor has not registered with HMRC or cannot provide accurate details to the contractor and HMRC cannot verify them.

HMRC will give the contractor a verification number for the subcontractors which will be matched with HMRC’s own computer. The number will be the same for each subcontractor verified at any particular time. There will be special suffixes for the numbers issued in respect of subcontractors who cannot be verified. The numbers are also shown on contractors’ monthly returns and the payslips issued to the subcontractors.