HMRC has often paid attention to individuals who, ought to be “employed” through their paymasters compared with providing their services on a “self-employed” basis. The reason being different tax treatment can be applied.
When the beater’s salary should really be “earnings from employment” then it must be susceptible to PAYE and National insurance. This process may be tedious pertaining to both the individual and the shoot and can bring in penalties if not applied correctly. Beaters and the shoot will undoubtedly want to steer clear of this.
Basic tax demands
An Employer need to operate PAYE plus National insurance in respect of all workers. This contrasts with a self-employed person who must account for their own personal income tax and also National insurance to HMRC under Self Assessment.
PAYE can require long signing up, frequent payments to HMRC, filing deadlines and fines for incorrect or even late reporting. There will also be both equally employers plus employees’ National insurance contributions to administer. As a result, where possible, it isn’t surprising that beater (and also shoot) would prefer the beater be treated as self-employed in order to avoid the demanding PAYE problem.
HMRC would certainly of course prefer most people to be addressed as “employed”. NI contributions may also be greater as well as expense claims are more restrictive for the “employed” individual.
HMRC approach to beaters
Within HMRC’s continued quest to squeeze the taxpayer further – the beater/shoot relationship hasn’t gone undetected. The work status and technique of remunerating a beater needs to be established by whether the individual is a ‘casual beater’ or perhaps not.
A ‘contract’ from a casual beater and a shoot is going to be considered as 1 of service (“employment”) and as a result the usual PAYE commitments will need to apply. However, HMRC acknowledges that practical problems may arise when employers have to operate PAYE for brief arrangements on small amounts. Thus HMRC have concluded that beaters may be treatable as every day casuals and taxes doesn’t need to be subtracted provided:
i) The beater is employed for a period of up to a day and the employment ends that day with no arrangement for additional employment
ii) The beater is compensated in cash at the end of that working day
To ensure the employment does indeed cease on the exact same day, there can be absolutely no agreements in place to keep the services beyond that point. But the same beater can be utilized by the same shoot once again in the future. If there was a legal contract (implied or formal) with regard to future services then this can be a ‘contract’ and PAYE obligations will come into force.
It is advisable to be aware that if HMRC do evaluate a beater as being currently employed, it does not routinely entitle the “employed” beater to the associated rights of employment for example vacation or sick pay. HMRC determination is only relevant for their collection of tax and NI functions.
An extra caveat to the above ‘casual’ treatment can be that it isn’t going to apply to National insurance. The employer (the shoot) will nevertheless as a result need to deduct employee’s National insurance and pay employer’s NI if the minimum NI threshold is surpass (£97/wk).
Further responsibilities
Also, any operated shoot is still expected to keep data of all paid beaters’ earnings, names plus addresses. Also beaters need to keep records of revenue received and paid.
Because of the specialist nature of beaters and many other countryside professions, seeking specialist advice is always suggested.
Resources
The article writer knows a lot about taxation doing work for Price Bailey qualified as a Chartered Accountant in the year 2006 and as a Chartered Tax Adviser in the year 2008. The author also has experience with VAT for shoots and has recently succeeded in a case against HMRC relating to registering a local syndicate shoot for VAT purposes.
