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HMRC - RTI and beaters - Update

HM Revenue & Customs (HMRC).

 

The issue of RTI has caused confusion for many shoot owners and managers. The Countryside Alliance has been investigating this issue and seeking the advice of professionals and working directly with HM Revenue & Customs (HMRC).

HMRC are now aware of the issues the new system could cause with shoots. The subject is continually evolving but below is the latest guidance available at the time of writing. Please monitor the Countryside Alliance and HMRC websites for future updates. 

 

UPDATE 3/4/13

HMRC have also announced a relaxation of reporting arrangements for small businesses with fewer than 50 employees until October 5th 2013. Some shoots may find this relaxation applies to their situation. For more information on this, click here.



What is RTI?

From 6 April 2013 all companies will have to start reporting PAYE information in real time. This is referred to as Real Time Information - or RTI. Unless HM Revenue & Customs (HMRC) has notified companies directly, changing to PAYE in real time is mandatory. Each time an employee is paid after 6 April 2013, employers must submit details about employees' pay and deductions to HMRC using payroll software. The onus is on the employer to comply with this system and there will be penalties for failure to do so.

After 6 April 2013 employers will still operate PAYE in the same way but must submit the payroll information to HMRC on or before the day employees are paid, using a payroll software to produce a Full Payment Submission (FPS). These will include details of:

  • the amount you paid your employee(s)
  • deductions, such as Income Tax and National Insurance contributions (NICs)
  • starter and leaver dates if applicable

Details must be included of all employees paid, including those who earn below the NICs Lower Earnings Limit (LEL).

 

HMRC approach to beaters past and present

Up until recently, HMRC recognised the practical problems that arise when employers have to operate PAYE for such short term arrangements on fairly small amounts.  HMRC therefore agreed that beaters could be treated as daily casuals and tax did not need to be deducted provided that the following conditions are satisfied:

  • The beater is engaged for a period of up to a day and the employment ends that day with no agreement for further employment; and
  • The beater is paid off in cash at the end of that day 

Under the new RTI rules, these exemptions will no longer apply and anyone who falls into the category of employee must report through RTI. To see if your beaters qualify as employees, see here.

http://www.countryside-alliance.org/ca/campaigns-shooting/beaters-and-rti-advice

 

 

“Casual Worker” easement

HMRC have now confirmed that easements designed for casual workers will also apply to beaters. This gives the employer a period of seven days in which to report the employee details through RTI. Details of this easement can be found here:

http://www.hmrc.gov.uk/payerti/on-or-before.pdf

Under the new rules, employers need to report payments to all staff no matter how much they are paid. Employees on a temporary or casual basis, including beaters, are treated the same as all your regular employees.Tax and National Insurance must therefore be deducted (if applicable) and these details included on the Full Payment Submission (FPS). As a result, employers will have to enter details of these employees onto their payroll system, including National Insurance numbers and addresses.

In addition to these deatils, the amount of hours worked must also be reported within the submission, so it is imperative that remuneration is in accordance with the National Minimum Wage for the age group of the beater. These new rules will apply to all beaters and other casual workers.

 

 

 

Know your position

The consequences of beaters being incorrectly treated for employment tax purposes can be significant with penalties and interest applying to both the deemed employer and the deemed employee. Of course every situation is different, with its own unique set of determining factors that will be fundamental to the employment outcome. If you feel that you may be affected by this then a good starting point for more information is HMRC’s further guidance on determining employment, published on their website. However such guidance is very broad and due to the specialist nature of beaters and many other countryside professions, seeking professional advice is always recommended.

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