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November 05 2011

pricebailey1u

Just how can The Beater/Shoot Beat the Inland revenue?

HMRC has often paid attention to people who, should often be “employed” through their paymasters compared with providing their services on a “self-employed” basis. This is because different tax treatment is applicable.

If the beater’s salary really should be “earnings from employment” subsequently it needs to be governed by PAYE as well as National insurance. This approach can be tedious for both the individual as well as the shoot and can bring in fees and penalties if not carried out correctly. Beaters and the shoot will want to avoid this.

Basic tax requirements

An Employer should operate PAYE and NI in respect of all workers. This contrasts with a self-employed individual that should account for their own income tax plus National insurance to HMRC under Self Assessment.

PAYE can include lengthy registration, frequent payments to HMRC, processing deadlines and penalty charges for incorrect or even overdue reporting. There should also be both equally employers as well as employees’ NI contributions to administer. Consequently, where feasible, it is not surprising that beater (and also the shoot) would rather the beater always be treated as self-employed in order to avoid the arduous PAYE problem.

HMRC would certainly obviously prefer the majority of people to be treated as “employed”. NI contributions will also be greater plus expense claims will be more restrictive for the “employed” individual.

HMRC strategy to beaters

Within HMRC’s ongoing pursuit to squeeze the taxpayer further - the beater/shoot relationship has not yet gone unnoticed.

The employment status and means of remunerating a beater really should be based mostly on if the individual is a ‘casual beater’ or perhaps not.

A ‘contract’ from a casual beater and the shoot shall be deemed as 1 of service (“employment”) and as a result the usual PAYE commitments will need to apply. However, HMRC acknowledges that practical issues can easily occur whenever employers have to operate PAYE for brief arrangements on small quantities. Therefore HMRC have decided that beaters can be treated as day-to-day casuals and also income tax doesn't need to be deducted provided:

i) The beater is engaged for a period of up to a day and also the employment finishes that day with no agreement for more employment

ii) The beater is paid in cash at the end of that day

To ensure that the employment truly does end on the same day, there can be no agreements set up to continue the services outside of that time. But the same beater can be used by the same shoot again in the future. If there was an agreement (implied or even formal) with regard to future services then this can be a ‘contract’ and PAYE obligations would come into power.

It is advisable to observe that if HMRC do assess a beater as being employed, this doesn't automatically entitle the “employed” beater to the associated privileges of employment for instance vacation or even sick pay. HMRC determination is only applicable for their collection regarding taxes and National insurance functions.

Another caveat to the above ‘casual’ treatment can be that it isn't going to apply to NI. The employer (the shoot) will nonetheless therefore have to deduct employee’s NI and pay employer’s National insurance if the minimum National insurance threshold is exceeded (£97/wk).

Additional obligations

Also, any operated shoot is still required to keep data of all paid beaters’ revenue, names and addresses. Also beaters should keep data of salary received plus paid.

Because of the specialist nature of beaters and many other country side professions, seeking professional assistance is always suggested.

Resources

The article writer knows a lot about taxation earning a living for Price Bailey qualified for a Chartered Accountant in '06 and as a Chartered Tax Adviser in '08. The article writer has also knowledge about VAT regarding shoots and has recently succeeded in a case in opposition to HMRC regarding registering a local syndicate shoot for VAT purposes.

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