Employing Casual Labour

Discussion in 'General Business Forum' started by OasisGardening, Dec 31, 2010.

  1. OasisGardening

    OasisGardening UKBF Newcomer Free Member

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    I run a gardening business which I have operated on my own for the last 2 years.

    I don't have enough work ongoing to need to employ a person, however, based on my experience last year as the business has grown, there are times where an extra pair of hands would be useful for one off jobs, so my ideal would be to employ "casual labour" to bring someone in to help as 7 when I need help.

    The nature of this work would mean that it would be a payment by cash / cheque rather than through PAYE, so how would I stand from a PAYE & NI position? Would I still be liable for paying the "employees" tax & NI on what they earn with me?
    Posted: Dec 31, 2010 By: OasisGardening Member since: Nov 18, 2010
    #1
  2. David Griffiths

    David Griffiths UKBF Regular Moderator

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    It doesn't matter whether the employee is full time or casual, the same PAYE procedures have to be followed (and the same procedures to ensure that the employee is entitled to work in the UK)

    If you fail to deduct PAYE, then you will be liable yourself

    No doubt this will cue the normal stream of wailing and gnashing of teeth about the system being unfair, and too much work, but that's the way it is.
    Posted: Dec 31, 2010 By: David Griffiths Member since: Jun 21, 2008
    #2
  3. OasisGardening

    OasisGardening UKBF Newcomer Free Member

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    Thanks for the reply.

    And there's no minimum work amount cut off for these procedures to kick-in - so even if they only end up doing one days work I still need to go through the PAYE procedures?
    Posted: Dec 31, 2010 By: OasisGardening Member since: Nov 18, 2010
    #3
  4. sanjiv

    sanjiv UKBF Contributor Free Member

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    If the helper was self-employed and wrote you an invoice for their work, you would not need to worry about PAYE and NI and they would pay this themselves on their Tax Return. It is only if you employ them that you have to pay them through PAYE.
    Posted: Dec 31, 2010 By: sanjiv Member since: Feb 15, 2010
    #4
  5. smo

    smo UKBF Contributor Free Member

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    I'd go down the cheque payment and let them sort it self-employed basis, you can safely assume that a labourer who works on odd-jobs would be doing this for several companies to allow earning of a decent income, hence PAYE wouldnt be suited as it would be a split tax-code nightmare!
    Posted: Dec 31, 2010 By: smo Member since: Apr 3, 2010
    #5
  6. David Griffiths

    David Griffiths UKBF Regular Moderator

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    'fraid so



    But it's the "employer" that is fully responsible for getting the worker's employment status correct. You can't just decide that somebody is self employed. If an HMRC inspector disagreed they would assess the employer for the full amount of tax and NI on grossed up wages
    Posted: Dec 31, 2010 By: David Griffiths Member since: Jun 21, 2008
    #6
  7. sanjiv

    sanjiv UKBF Contributor Free Member

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    The worker would decide he is self employed and invoice the OP. It is then surely the workers duty to make sure he pays his tax. The OP is just using the services of another company.
    Posted: Dec 31, 2010 By: sanjiv Member since: Feb 15, 2010
    #7
  8. aurel

    aurel UKBF Newcomer Free Member

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    does not exist such think as casual labour(tax exempt) , you need to be registered with the tax office as a contractor ,then each time you employ someone (even for half day work) you need to ring accounts office give the details and they will give you a verification code where you will pay the tax for the said worker at the percentage stated by them. You don't decide the tax rate or his employment status hm revenue does that, if it happens to be registered as self employed then they will know , if hes not allowed to work they will tell you that as well ; Just ring tax office with all details of the worker to cover yourself ,if you don't get a verification number don't employ him/her because you won't be able to pay the taxes for that salary and will be considered as black market work. Your accountant should be able to help you with this
    Posted: Dec 31, 2010 By: aurel Member since: Dec 29, 2010
    #8
  9. David Griffiths

    David Griffiths UKBF Regular Moderator

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    Plain wrong. The employer is responsible for deciding the status of the worker, and is the one that carries the can if the decision is incorrect.
    Posted: Dec 31, 2010 By: David Griffiths Member since: Jun 21, 2008
    #9
  10. estwig

    estwig UKBF Regular Free Member

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    Pay 'em cash outta your pocket.
    Posted: Dec 31, 2010 By: estwig Member since: Sep 29, 2006
    #10
  11. David Griffiths

    David Griffiths UKBF Regular Moderator

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    That only applies within the construction industry and the bit highlighted is completely wrong. The main contractor makes a monthly return in which he confirms that the subcontractors are self employed - with hefty penalties for getting it wrong.
    Posted: Dec 31, 2010 By: David Griffiths Member since: Jun 21, 2008
    #11
  12. sanjiv

    sanjiv UKBF Contributor Free Member

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    Don't think that would be very tax effective would it but it depends on the amount of work.
    So when I get an invoice from a sole trader, maybe for cleaning my windows or something, do I have to check that he is a sole trader?
    Posted: Dec 31, 2010 By: sanjiv Member since: Feb 15, 2010
    #12
  13. David Griffiths

    David Griffiths UKBF Regular Moderator

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    You have to be sure that the work that he does for you is not as an employee, which is not the same thing. If you correctly conclude that he is self employed, it's not your problem if he pays his taxes correctly.
    Posted: Dec 31, 2010 By: David Griffiths Member since: Jun 21, 2008
    #13
  14. sanjiv

    sanjiv UKBF Contributor Free Member

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    How can you come to that conclusion? Where do you check this?
    Posted: Dec 31, 2010 By: sanjiv Member since: Feb 15, 2010
    #14
  15. RedEvo

    RedEvo UKBF Regular Free Member

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    I think perhaps this discussion has gone off track with the window cleaning example. If you hire soneone to work for your business then you need to make sure they are truly self employed so you don't get stung for rounded up Tax and NI is they don't cough up to the tax man, it's been like this for years.

    It was for this reason that one man band ltd companies started. I worked in the oil industry as a contractor and at one time you could be self employed. However people didn't pay their tax so the law was changed and the employment agencies stopped allowing self employed status to be used as they were getting stung for un paid tax.

    d
    Posted: Dec 31, 2010 By: RedEvo Member since: May 12, 2007
    #15
  16. David Griffiths

    David Griffiths UKBF Regular Moderator

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    The Revenue's view of things is here. However, they clearly err towards deciding that somebody is employed, and the correct decisions are based on a raft of decided cases. That said, it's a useful starting point.
    Posted: Dec 31, 2010 By: David Griffiths Member since: Jun 21, 2008
    #16
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  17. sanjiv

    sanjiv UKBF Contributor Free Member

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    I was not implying that they would not be truly self employed and paying tax. They would be paying tax on their self assessment.
    Thanks for the link. I understand your point. It would be much easier for the OP though if it could just be an invoice. The Employed or self-employed? section makes it clear that he would have to be employed.
    Posted: Dec 31, 2010 By: sanjiv Member since: Feb 15, 2010
    #17
  18. E Storey

    E Storey UKBF Contributor Free Member

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    This is totally wrong. You should not be dishing out advice like this if you are unaware of these basic facts!

    It is not the worker who decides, it is HMRC.

    http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073792190&type=RESOURCES
    Posted: Dec 31, 2010 By: E Storey Member since: Jul 12, 2010
    #18
  19. RedEvo

    RedEvo UKBF Regular Free Member

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    That would be quite a tax system. Is it the 'wing and prayer' method of taxation?

    :)

    d
    Posted: Dec 31, 2010 By: RedEvo Member since: May 12, 2007
    #19
  20. sanjiv

    sanjiv UKBF Contributor Free Member

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    You declare yourself as self employed so HMRC does not decide, you do. It is when you setup your own business as sole trader/partnership/LLP. I was referring to the casual laborer becoming sole trader. David Griffiths has already explained why this cannot be done.
    Posted: Dec 31, 2010 By: sanjiv Member since: Feb 15, 2010
    #20