I hope that you all had a good weekend and didn't get too adversely affected by the snow. Didn't get any in Plymouth :(
Anyway, I have just taken on a client (restaurant) which I will be acting as Financial Controller/Accountant overseeing the financials of the business. It appears that they pay most if not all of their casual staff by cash and are not procesing them through a payroll. I was wondering what would be the best/correct way for them to account for tax & nic's. My first thought was for them to get the employees to sign P46's and then gross up all cash payments so the employer picks up the costs of all tax & nic's but was wondering if there was another way that I am missing.
When I ran a similar business I had all staff on contracts and processed all through PAYE.
I've been speaking to a partnership just starting out who's business is only likely to be active during the summer months and travels place to place hiring anyone who'll lift and shift for them. £100 a day and a festival ticket for two days work is what they want to pay out - any ideas?
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Edit: Sorry - I didn't mean to hijack the thread
-- Edited by pDm on Tuesday 7th of February 2012 07:22:37 PM
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my blog "the bookkeeper's in town - learning the hard way"
no worries - if students they would fit in nicely - whole list to make sure of though (only certain times working etc), but P46 answers most problems, £100 per WEEK would go over NI I believe so would personally put through full payroll - its really for the adhoc workers that NI wouldnt kick in.
apologies I put £100 per day - should be per week
-- Edited by Donna CBK on Wednesday 8th of February 2012 04:37:57 PM
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
I have similar situation with a client where they employ staff as casual. I did speak to the accountant to find out the history, it was agreed that if definately people with 2nd job or a very low wage then they could keep their own records but must have forms etc. when join the company (ie P46 confirming 2nd employment/no other job etc.etc.). the full time staff are on payroll.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
Casual labour which lasts less than 1 week can be paid cash in hand. The employee is effectively self-employed and responsible for their own PAYE & NIC. Any longer than 1 week and they must be on the payroll.
This might help http://www.hmrc.gov.uk/working/intro/casual.htm and http://www.hmrc.gov.uk/calcs/esi.htm
HMRC love crawling all over employers if the suspect sham self-employment
I looked at the first link and admit to being none the wiser - but after using the Employment Status Indicator (ESI) tool, it's apparent that the status of the casual labour would be classed as self employed.
Thanks for the links :)
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my blog "the bookkeeper's in town - learning the hard way"
It may be that a minority of the staff could argue freelance, providing they were also carrying out work for other client's. I'd have thought that the majority of restaurant staff were employees, pure and simple. The onus would be on the employer to prove their self employment status with a UTR, providing their own tools, keepiing their own time etc. Difficult to do, but perhaps their are chefs in the trade who 'guest' for short periods.
I've just taken on a high street shop client who's previous accountant seemed to have connived with the proprietor in three of four aspects. One of these was his advice that 'providing the employee signs for their wages, they may take care of their own tax'. He probably got off lightly with a 5K PAYE bill.
Thanks for your replies, after reading them and meeting with the client it has been agreed that the only way to proceed without incurring the wrath of HMRC was to deal with them as employees and process them through the payroll
@Tim, it makes you wonder how these accountants operate with advice like this.
