HMRC has often taken notice of people who, should be “employed” by their paymasters instead of offering their services on a “self-employed” basis. This is because varying tax procedure can be applied.
If a beater’s salary should be “earnings from employment” then it needs to be susceptible to PAYE plus National insurance. This process can be onerous for both the individual and the shoot and will entice fees and penalties if not carried out correctly. Beaters and the shoot will no doubt want to avoid this.
Fundamental tax requirements
A Business need to operate PAYE as well as NI with respect of all workers. This contrasts with a self-employed person who must take into account their own personal tax as well as NI to HMRC under Self Assessment.
PAYE can involve long signing up, regular payments to HMRC, submitting deadlines as well as fines for wrong or even late reporting. There should also be both equally employers plus employees’ NI contributions to administer. Therefore, where possible, it’s not surprising that beater (and also the shoot) would prefer the beater be treated as self-employed in order to avoid the demanding PAYE problem.
HMRC would likely of course prefer the majority of individuals to be treated as “employed”. National insurance contributions may also be greater and expense claims are more restrictive for the “employed” individual.
HMRC approach to beaters
Within HMRC’s continuing pursuit to squeeze the taxpayer further – the beater/shoot relationship has not yet been unseen.
The employment status and means of remunerating a beater ought to be based mostly on if the individual is a ‘casual beater’ or not.
A ‘contract’ between a casual beater and a shoot will be deemed as 1 of service (“employment”) and therefore the usual PAYE obligations should apply. Even so, HMRC acknowledges that practical problems can occur when employers have to operate PAYE for short term arrangements on small quantities. Consequently HMRC have decided that beaters may be treatable as day-to-day casuals as well as taxes doesn’t need to be deducted provided:
i) The beater is employed for a time period of up to a day and the employment finishes that day with no agreement for additional employment
ii) The beater is paid in cash at the conclusion of that day
To ensure the employment truly does end in the exact same day, there can be no agreements in place to carry on the services beyond that time. But the same beater can be utilized by the same shoot again in the future. If there was a contract (implied or even formal) regarding future services then this could be a ‘contract’ and PAYE obligations will come into force.
It is important to observe that if HMRC do assess a beater as being currently employed, it doesn’t automatically entitle the “employed” beater to the associated privileges of employment for example vacation or sick pay. HMRC determination is only relevant for their collection of tax and NI purposes.
Another caveat to the above ‘casual’ treatment can be that it does not apply to National insurance. The employer (the shoot) will nevertheless as a result have to deduct employee’s NI as well as pay employer’s National insurance if the minimum National insurance threshold is surpass (£97/wk).
Additional obligations
Also, any operated shoot will still be needed to keep records of all paid beaters’ revenue, names plus addresses. Likewise beaters need to keep records of revenue received and paid.
As a result of specialist nature of beaters as well as many other countryside professions, seeking professional assistance is always recommended.
Resources
The article writer knows loads about taxation doing work for Price Bailey qualified for a Chartered Accountant in ’06 and as a Chartered Tax Adviser in 08. The article author has also experience with VAT regarding shoots and has recently succeeded in a case against HMRC concerning registering a local syndicate shoot for VAT purposes.
