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

HMRC has always paid attention to those who, ought to often be “employed” through their paymasters instead of giving their services on a “self-employed” basis. For the reason that varying tax treatment applies.

If the beater’s salary needs to be “earnings from employment” then it must be susceptible to PAYE as well as National insurance. This process could be onerous pertaining to both the individual and the shoot and will attract penalties if not implemented correctly. Beaters and the shoot will want to avoid this.

Basic tax requirements

A Business should operate PAYE as well as NI with respect of all employees. This contrasts with a self-employed person who should account for their own income tax and NI to HMRC under Self Assessment.

PAYE can easily require long registration, frequent payments to HMRC, submitting deadlines and penalties for incorrect or overdue reporting. There will also be both employers and employees’ National insurance contributions to manage. Consequently, where probable, it is not surprising that beater (plus the shoot) would rather the beater be treated as self-employed in order to avoid the troublesome PAYE problem.

HMRC would certainly of course prefer the majority of people to be addressed as “employed”. National insurance contributions may also be greater as well as expense claims will be more restrictive for the “employed” individual.

HMRC approach to beaters

Within HMRC’s persisted pursuit to squeeze the taxpayer further - the beater/shoot relationship hasn't been unnoticed.

The work status and process of remunerating a beater needs to be influenced by whether the individual is a ‘casual beater’ or not.

A ‘contract’ between a casual beater and the shoot will be deemed as 1 of service (“employment”) and as a result the usual PAYE requirements should apply. However, HMRC recognises that practical difficulties can easily occur when employers should operate PAYE for brief arrangements on small sums. Thus HMRC have agreed that beaters may be treatable as every day casuals and taxes does not need to be subtracted provided:

i) The beater is employed for a period of up to a day along with the employment ends that day without any arrangement for more employment

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

To ensure the employment does indeed terminate on the very same day, there can be simply no arrangements in place to carry on the services outside of that point. But the same beater can be utilized by the same shoot again in the future. If there was an agreement (implied or formal) regarding 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 assess a beater as being currently employed, it doesn't automatically entitle the “employed” beater to the related privileges of employment such as vacation or even sick pay. HMRC determination is only applicable for their collection regarding taxes and NI purposes.

An additional warning to the above ‘casual’ treatment will be that it isn't going to apply to National insurance. The employer (the shoot) will still consequently need to subtract employee’s National insurance and pay employer’s NI if the minimum NI threshold is exceeded (£97/wk).

Additional responsibilities

Also, any operated shoot is still expected to keep data of all paid beaters’ revenue, names and addresses. Also beaters should keep records of income received and paid.

Due to the specialist nature of beaters as well as many other country side professions, seeking expert assistance is always recommended.

Resources

The writer knows a lot about taxation doing work for Price Bailey certified for a Chartered Accountant in 06 in addition to being a Chartered Tax Adviser in '08. The article author has also experience with VAT regarding shoots and has recently succeeded in a case in opposition to HMRC relating to registering a local syndicate shoot for VAT purposes.

Published October 27th, 2011

Tags: Tax, Strategy, Accounting, auditing, chartered, accountant, Price, Bailey, London