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Chartered Certified Accountants
and Business Advisors

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Employing casual staff

As an employer you must pay a worker a fair wage for a fair days work and also provide a workplace pension, welfare and much more. You also need to act as unpaid tax and NI collectors by operating the increasingly complex PAYE system. An error in this system can result in too little tax and NI being collected therefore leaving you with a bill.

 

HMRC used to take a relaxed approach to casual workers where they are employed for a week or less. If you employ them for two weeks or less you can pay them without deducting PAYE tax or NI.

 

However, since the introduction of RTI HMRC say you should treat casual workers for PAYE just the same as you would permanent staff. This includes notifying the revenue of their starting and leaving details on a full payment submission.

 

When you employ someone for just a couple of days or weeks, they may not have P45 from their previous job therefore you should give them the ‘starter checklist’ to complete to establish the correct code to operate. Getting the new member of staff to fill this checklist in on day one of employment can save you from falling in the trap of using an emergency code to work out their tax as HMRC are likely to ask you to pay the shortfall.

 

Another trap is agreeing the cash in hand amount of pay as this can cost you more than you might think. Avoid cash in hand pay, use normal pay arrangements for casual workers to avoid unexpected tax and NI costs.

25 Jun 2018

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