Sunday, November 19, 2017

Shoots risk falling foul of minimum wage and tax rules

September 12, 2017 by  
Filed under Property

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Shoots who use beaters and pickers-up are being advised to need to double-check whether they are inadvertently breaching rules on minimum wages – and what and when they should be reporting to HMRC.

The rules surrounding the use of beaters are complicated, which financial and legal experts say is leading to confusion among shoot operators – including farmers running private shoots – about what they need to do to comply.

Property experts Strutt & Parker, legal advisors Michelmores and accountants Saffery Champness have produced a joint briefing paper to help guide landowners through the potential pitfalls as the main shooting season gets under way this autumn.

The guidance note looks at the need for any lump sum daily payment to comply with the National Minimum Wage and National Living Wage, and also examines when shoots need to deduct tax and supply Real Time Information to HMRC.

Strutt & Parker adviser Rhodri Thomas said: “This is a complicated issue, with one of the difficulties being that many beaters and pickers up do not view what they do as a job or employment, as they do it for pure enjoyment.

“However, the authorities may still class them as an employee. Where this is the case, the rules on minimum wage apply unless it is possible to prove to HMRC that the arrangement between the beater and the shoot meets its definition of a very casual arrangement.”

Mr Thomas said many people would consider the rules unreflective of how shoots, and beaters, operate and will hope for a change in them. But it was important to gain a proper understanding of the rules in place at the current time.

Wages

All ‘workers’ on a shoot must be paid at least the National Minimum Wage, which applies to people under 25, or the National Living Wage, if over 25, for every hour that they work. This is a legal requirement and it is not possible to opt out.

Ben Sharples, partner in the agricultural team at Michelmores, said: “Who is a worker is widely defined and is likely to cover most beaters, and in particular those operating on formal commercial shoots.

“There are exemptions for anyone who is genuinely self-employed, but to prove this they would probably need to be actively marketing their services to third parties, rather than just being recruited by a shoot to be an integral part of it.”

Tax

Shoots are responsible for accounting to HMRC for PAYE and National Insurance Contributions for any permanent employees.

Liz Brierley, partner at Saffery Champness, says: “This means that every such time an employee is paid, the shoot must tell HMRC how much tax and National Insurance has been deducted using the on-line Real Time Information system.

“Since April 2016, the exemption under RTI that allowed shoots to report payments to beaters on a monthly basis has been removed. This change now means all payments will need to be reported to HMRC within seven days.

“Shoots do not have to deduct tax and National Insurance from a worker’s pay if they employ them for two weeks or less as a casual worker. However, their pay is still taxable income and the worker must ensure that any tax due is paid. Some shoots choose to pay tax on behalf of the worker to avoid any potential underpayment.”

Shoots must keep records of all payments they make to workers for at least three years. This allows HMRC to track whether the worker has paid the tax required.

As a minimum, a shoot should have a record of the name, date of birth, gender, NI number, address and how much it has paid each worker.

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