| PAYE:
FARMING and HARVEST CASUALS
The Inland Revenue are reaping rewards
from the introduction of the Agricultural Compliance Unit, and are paying
particular attention to cash payments, and the operation of PAYE and
National Insurance provisions.
One specific area of interest is harvest casuals, where special rules
apply to casual employees taken on for harvest work, who are not members
of the farmers family.
Where an employee is taken on for no more than two weeks, and has not
already worked for the farmer since 6 April 2000, unless just for one day,
where payment was made in cash, with no agreement to do further work, the
record keeping procedure is as follows:
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a)
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If paid less than £66 per week – a record must be
kept of the name, private address, and amount paid, and the appropriate
entry made on the form P38A at 5 April 2001.
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b)
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If paid more than £66 per week – the National
Insurance should be calculated, and entered on the employee’s
deduction card, with a further record made of the name, private
address, and amount paid. It is important to remember that you do not
have to deduct tax even if the pay exceeds the PAYE threshold.
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c)
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The above is a specific industry concession, and
where an employee has already worked for the farmer since 6 April 2000,
or will be employed for more than two weeks, then the normal rules for
the operation of PAYE regulations will apply, suitably amended as to
whether the employee can provide a form P45 or not.
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This concession does not affect the
special procedures for students working during their holidays, which
follows a) and b) above, providing the student completes form P38(s),
Student’s Declaration.
Where the services of a gang master or contractor are employed, it is
vital to record details of:
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1)
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all the payments made;
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2)
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the number of workers involved, and
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3)
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the circumstances under which payments are made to
the gang master, and not directly to the individual workers.
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Any failure to maintain appropriate
records can lead to a review of the last six years, and the possible
imposition of penalties. It is important therefore to remember that whilst
the regulations demand the records should be retained for at least three
years after the end of the relevant tax year, in practice six years should
be retained wherever possible.
© Dendy Neville
6 July 1999
Updated 31 January 2002
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