There was much speculation over the summer as to how HMRC’s new Real Time Information (RTI) system for reporting pay would affect casual workers on shoots. The squawking and alarm would have done justice to the effects of finding a fox in the release pen! In reality it’s turned out not to be so bad after all, though a small number have decided that shoot work is no longer for them.
Here, in the Chilterns, we have a range of shoots from private to commercial, with some doing both. All employ sizeable teams of beaters and pickers-up, so we’re representative of larger shoots when it comes to pay and tax. Previously, nobody focused much on tax even though it was legally payable on the cash that is routinely paid out on a shoot day.
Just to remind ourselves, it remains permissible to pay beaters without deduction of tax as long as three conditions are met: employment must be for one day or less; the beater must be paid at the end of the day; and there can be no agreement for further employment. The big change is not in how payment is made but in the way it is reported to HMRC. One shoot reports that the daily casuals software marketed by SUM-IT (www.sum-itsoftware.co.uk) works well for RTI and daily cash payments.
Payment doesn’t have to be in cash, but this is usually the most practical solution. In this context, “beater” includes the gamecart man, flankers and any loaders employed and paid by the shoot. (See below for pickers-up and other loaders.)
Shoots have taken this opportunity to review what casuals are paid — in some cases, the payments had remained unchanged for a decade or more. The result was that most have increased pay by 20 to 25 per cent. In practice, this increase will cover any tax liability that casuals may have, but puts the shoot’s costs up significantly. Most are now being much more fussy about the number of staff they pay on the day. If you turn up without being asked you’ll probably be allowed to participate and will get lunch but no pay. One local shoot now gets several unpaid volunteers every day, which shows many do it just for fun.
A free lunch
On the subject of lunch, there has been concern that this might be taxable as a benefit in kind. The good news is that it isn’t, provided everybody involved in the shoot gets it and it is served on the shoot premises. “Everybody” in this context means administrators and so on as well as those who tramp the woods and fields. The other perk that some feared might be taxable is the brace of birds that many shoots offer casuals at the end of the day. The cost to the shoot is around £1 and can probably be disregarded as trivial.
For casuals, the main concern is that they might get involved in a lot of tax-related paperwork, but in many cases they won’t. Several shoots have given casuals the opportunity of being included on the payroll and being taxed under the Pay As You Earn (PAYE) system, which saves most beaters any paperwork. Where this is done, the shoot is not obliged to pay the person at the end of the day and there can be agreement for further employment. Payment can be daily, weekly or monthly.
Shoots using this system are making payment direct to the bank by BACS. However, some beaters are not keen on their earnings going into joint bank accounts. One has told me that he will open a personal account to receive these payments, which he regards as being his own perks and nothing to do with his wife!
If you are still being paid in cash without deduction of tax you remain liable for tax on your earnings if your income is over the threshold for basic rate tax (£9,440, £10,500 or £10,660, depending on age). If your total income from all sources is below the threshold then no tax is due. HMRC has said it may contact the employee to ensure any tax due is paid. In the past this was hard for them to do but will be easier under RTI.
Some shoots may be trying to claim that the money paid to workers is a contribution towards expenses. HMRC says quite clearly that if this contribution is a lump sum, as opposed to a refund of actual expenses, it counts as income and is taxable. If loopholes of this nature exist they’re not obvious.
The National Organisation of Beaters and Pickers Up (NOBs) has advised its members that in addition to giving their National Insurance (NI) number, date of birth and so on, they also have to produce photo identification. HMRC does not require that photo ID be provided. However, like every other employer, shoots are required to satisfy themselves that any employee has the right to work in this country. One way of doing this is to ask to see a passport which, either by nationality or by visa, will indicate if the employee has the right to work here.
The interests of most pickers-up and loaders will be best served by becoming self-employed. This does involve some paperwork, because you will have to keep track of expenses and earnings. You do not need to provide full details on the tax return, just the totals, but you must keep the paperwork in case there are queries. You will soon find that, for most people, expenses will exceed income and you can ask for the resulting loss to be offset against other income, or, if you have no other income, carried forward.
If you already complete a tax return(9million people do every year), you will need to complete the self-employed pages. If you don’t already do this you will have to ask HMRC for a return.
A few pickers-up have opted to be paid under PAYE to avoid the need for extra paperwork. That’s fine, but you will end up paying more tax than you need — the Chancellor will be thrilled. The rest of us are invoicing shoots on a daily or monthly basis, and this is working well. Some shoots are paying cash, others by BACS.
One casualty of RTI may be cash payments. Half the local shoots I’ve consulted have put all their employees on the payroll and are paying by BACS. Cash is nice to have in the hand but is a hassle for the shoot and can be for the beater too if tax has not been deducted.
Small shoots with DIY keepers and a beating line consisting of wives, girlfriends and children have no tax concerns but get just as much fun! There are slightly different rules for shoots with no employees paid above the Lower Earnings Limit, which might apply if your keeper is part-time.
Note, the advice provided here is generic and does not cover all situations. If you have queries, visit the HMRC website www.hmrc.gov.uk. For useful advice on self-employment, visit www.which.co.uk/money/tax/guides/tax-for-the-self-employed.