You have a need for casual labour. Although there’s been no shortage of people offering their services on a daily basis you’ve shied away because of all the formalities involved. Is there a way through the red tape?
Xmas/ Summer Workers
For a variety of reasons, your business is short on labour. The good news is there’s no shortage of people knocking on your door offering their services on a casual basis- a day or two at a time. But you know how fussy the Taxman is and when it all boils down you can’t really be bothered with all that form filling and deductions from pay. But there is still that big order to get out……………..Is there a way past the Taxman?
Forms. Actually, if you’re careful, the rules aren’t nearly as onerous as you might think. If you employ someone for a week or less (and they earn less than£102), there’s no need to complete a P11. There is also no need to submit a P46. You do need to check name, address and national insurance number to identify them, e.g. with their passport. Everyone aged 16 should have an n.i number. If they forget it and say “don’t worry I’ll bring it tomorrow”, and of course you don’t see them tomorrow, you shouldn’t have any problems with a PAYE inspector.
Irrespective of the number of days worked in a week, if the casual is paid more than £102 per week then PAYE tax and NI must be deducted and you will have to pay employers’ NI too. For certain types of work this kind of money could be earned in a single day.
- Tip 1. For the absolute minimum of fuss, employ casuals for no more than one week and pay them less than £102 in total for that week.
- Tip 2. Don’t forget the minimum wage (£6.08 per hour for adults aged 21over and £4.98 aged 18-20yrs. This means that if casual works for, e.g. four days and you pay them £102 in total, the maximum number of hours they can work per day is 4.2(102/4=£25.5/£6.08) In the case of 19-20 yr olds, this figure rises to 5.12 hours per day.
If you need any casual to work more hours, with the result that pay will exceed £102 per week, then you will need to make sure that PAYE at the basic rate and NI is deducted. At the end of the tax year you’re required to submit a Form P35 declaring all PAYE and NI accounted for. It will be far too late to think about collecting it from the casuals then.
You should record casual wages even if not paid through your payroll (often it will be straight from petty cash). This is not the same as having to keep detailed records for your “on-the-books” employees. Simply enter the casual’s details in a cash book together with a brief description of the hours worked, the rate of pay and what they did for that pay. A signature against the wages given will help too but by no means obligatory – don’t be surprised at all if some casuals show a marked reluctance to sign anything! This paperwork is simply to show why no tax/NI was deducted – just in case the inspector calls.
Tip. It’s far easier to maintain the basic record on a contemporaneous basis. Trying to patch something together at the last minute may well arouse suspicion.
At Griffin Payroll we offer affordable payroll solutions with:
- No minimum contract
- Fixed affordable fees from £1.50 per pay slip
- Excellent Customer Service
- Up to date with industry changes, including HMRC legislation
- No startup costs
- No employee leaver or starter costs