HMRC has always paid attention to those who, should be “employed” by their paymasters instead of providing their services on a “self-employed” rate. The reason being different tax treatment can be applied.
When a beater’s pay should be “earnings from employment” then it must be susceptible to PAYE plus National insurance. This approach might be tedious pertaining to both the individual as well as the shoot and will bring in penalties if not implemented correctly. Beaters and the shoot will want to steer clear of this.
Basic tax demands
A Company must operate PAYE plus National insurance in respect of all employees. This contrasts with a self-employed individual that should account for their own income tax plus NI to HMRC under Self Assessment.
PAYE can include extensive registration, frequent payments to HMRC, submitting deadlines as well as charges for wrong or even late reporting. There should also be both equally employers plus employees’ NI contributions to manage. Therefore, where feasible, it isn’t surprising that beater (and also shoot) would rather the beater be treated as self-employed in order to avoid the challenging PAYE burden.
HMRC would obviously prefer the majority of men and women to be addressed as “employed”. NI contributions are also greater and also expense claims tend to be more restrictive for the “employed” man or women.
HMRC solution to beaters
Within HMRC’s ongoing pursuit to squeeze the taxpayer further – the beater/shoot relationship has not yet been unseen.
The work status and procedure for remunerating a beater should be established by whether the individual is a ‘casual beater’ or not.
A ‘contract’ between a casual beater and the shoot is to be considered as one of service (“employment”) and therefore the usual PAYE obligations must apply. Nonetheless, HMRC acknowledges that practical complications can occur whenever employers have to operate PAYE for short term arrangements on small sums. Thus HMRC have concluded that beaters may be treatable as every day casuals and tax does not need to be deducted provided:
i) The beater is engaged for a time period of up to a day along with the employment ends that day with no arrangement for more employment
ii) The beater is paid in cash at the end of that working day
To ensure the employment does indeed end in the same day, there can be no arrangements set up to keep the services outside of that point. But the same beater may be used by the same shoot again in the future. If there was an agreement (implied or even formal) for future services then this can be a ‘contract’ and PAYE obligations would come into power.
It’s very helpful to realize that if HMRC do evaluate a beater as being employed, it doesn’t routinely entitle the “employed” beater to the related privileges of employment for instance holiday or even sick pay. HMRC determination is only appropriate for their collection regarding tax and NI purposes.
An additional caveat to the above ‘casual’ treatment can be that it doesn’t apply to NI. The employer (the shoot) will nonetheless therefore have to deduct employee’s NI as well as pay employer’s National insurance if the minimum National insurance threshold is exceeded (£97/wk).
Additional responsibilities
Also, any kind of operated shoot will still be required to keep data of all paid beaters’ revenue, names and addresses. Also beaters ought to keep data of revenue received and paid.
Because of the specialist nature of beaters as well as many other country side professions, seeking expert advice is always recommended.
Resources
The article author knows a lot about taxation being employed by Price Bailey qualified for a Chartered Accountant in ’06 in addition to being a Chartered Tax Adviser in ’08. The author has also knowledge about VAT for shoots and has recently been successful in a case against HMRC concerning registering a local syndicate shoot for VAT purposes.
