HMRC has often paid attention to people who, should often be “employed” through their paymasters in contrast to giving their services on a “self-employed” basis. The reason being varying tax treatment applies.

 

If a beater’s pay should be “earnings from employment” subsequently it needs to be susceptible to PAYE plus NI. This process can be tedious pertaining to both the individual and the shoot and will attract penalties if not implemented properly. Beaters and the shoot will wish to avoid this.

 

Basic tax requirements

 

A Company must operate PAYE plus NI in respect of all employees. This contrasts with a self-employed person who must take into account their own tax as well as National insurance to HMRC under Self Assessment.

 

PAYE can require long registration, regular payments to HMRC, processing deadlines and penalties for wrong or even late reporting. There will also be both employers as well as employees’ National insurance contributions to manage. Therefore, where feasible, it isn’t surprising that beater (and the shoot) would rather the beater always be treated as self-employed in order to avoid the demanding PAYE burden.

 

HMRC would of course prefer the majority of individuals to be treated as “employed”. NI contributions will also be higher as well as expense claims tend to be more restrictive for the “employed” individual.

 

HMRC solution to beaters

 

Within HMRC’s continuing quest to squeeze the taxpayer further – the beater/shoot relationship has not yet been unnoticed.

 

The employment status and means of remunerating a beater really should be established by whether the individual is a ‘casual beater’ or not.

 

A ‘contract’ from a casual beater and a shoot will be deemed as 1 of service (“employment”) and therefore the usual PAYE requirements must apply. Even so, HMRC recognises that practical problems can easily occur whenever employers should operate PAYE for short term arrangements on small sums. Thus HMRC have agreed that beaters can be treated as day-to-day casuals and also taxes does not need to be subtracted provided:

 

i) The beater is employed for a period of up to a day and also the employment ends that day with no agreement for additional employment

 

ii) The beater is paid off in cash at the conclusion of that working day

To ensure the employment truly does cease in the exact same day, there can be no agreements in place to carry on the services outside of that time. But the same beater may be used by the same shoot again in the future. If there was a legal contract (implied or formal) for future services then this can be a ‘contract’ and PAYE obligations will come into power.

 

It’s very helpful to observe that if HMRC do evaluate a beater as being currently employed, it doesn’t routinely entitle the “employed” beater to the related rights of employment such as vacation or sick pay. HMRC determination is only applicable for their collection of tax and NI purposes.

An extra warning to the above ‘casual’ treatment can be that it isn’t going to apply to NI. The employer (the shoot) will nevertheless consequently have to subtract employee’s National insurance as well as pay employer’s NI if the minimum National insurance threshold is exceeded (£97/wk).

 

Additional obligations

Also, any operated shoot will still be needed to maintain data of all paid beaters’ revenue, names plus addresses. Likewise beaters should keep records of income received plus paid.

Because of the specialist nature of beaters as well as many other country side professions, seeking expert assistance is always suggested.

Resources

The article author knows a lot about taxation doing work for Price Bailey qualified as a Chartered Accountant in 06 in addition to being a Chartered Tax Adviser in 08. The article writer also has knowledge about VAT for shoots and has recently succeeded in a case against HMRC concerning registering a local syndicate shoot for VAT purposes.