Does anyone know anything about employer casual/temporary workers with regards to tax/NI etc?

[zog]

I'm contemplating setting up a business where ideally I would want to employ people on a cash-in-hand basis. I have trawled the HMRC website but am now very confused as to how to do this. Surely there are lots of businesses who don't have everyone on the payroll? How's it done? Do you have to make them sign something saying they are responsible for their own tax & NI?

Hope I've explained myself properly

[gigglewitch]

if they are technically self-employed then yes they do sort out their own tax and NI. You are also able to have bank staff, where they are on your 'payroll' as such, but they work as and when required such as holiday or sickness cover, and not for a contracted number of hours per week. what line of business are you going into?

[gigglewitch]

you've seen this I take it?

[gigglewitch]

THIS is more user-friendly though!!

[zog]

Gardening. I'll have some "proper" employees but I want to be able to employ casual workers (probably teenagers) as and when. Obviously I could give them cash and say nothing else, but I'd quite like to do things properly IYKWIM. That part of the HMRC website seems to say (if I'm reading it correctly) that I could just take on people on the understanding that they were self-employed??

[zog]

I was thinking about caterers for example - when they have a wedding to do, they'll take on waiting staff just for that event and pay them cash. Is that illegal?

[gigglewitch]

I don't think with the waiting staff it's illegal as such but wonder if they call it "expenses" as a loophole?
good on ya for trying to do it properly. Flowerybeanbag and the other HR guru's should be along sometime tomorrow, maybe we bump for you then?! I'm a manager not a HR bod. I honestly don't know what the score is over employing teenagers at all.
Isn't there something on 'seasonal' workers where for instance you could give them casual hours during the summer when there's loads to do, but not be obliged to offer an equivalent during winter months? [was listening to something about this on radio this morning, scratching head now...] they are entitled to holiday pay and sick pay but pro rata, based upon the hours that they actually work. our casual staff accrue hours of holiday calculated on them working x number of days, and they have to take a week off and claim their holiday pay entitlement during that week, they can work for 12 weeks in a row and have to take the 13th off. If they have a break sooner than that they just claim whatever hours are owed to them.
Umm, now i don't think i make sense either. sorry

[zog]

It's a 'mare isn't it? I can think of so many examples - they can't all be breaking the law, surely??

Thanks for your help anyway. I'll bump this in the morning!

[gigglewitch]

direct.gov usually saves my sanity in questions like this.
will come bumping 2morro too! hope for some good advice, but it is such a complex topic, I don't envy anyone trying to get through it for the first time. Lots of luck.

[zog]

Thanks so much for your help gigglewitch. From what I've read on your links, cash-in-hand is illegal, unless the person is self-employed. Does that sound right?

I really would appreciate hearing from anyone who is an employer/employee in this position, or anyone with professional expertise! TIA

[zog]

.

[zog]

Anyone?

[ANTagony]

I started my own business taking on employees for the first time last year I registered for info at www.hmrc.gov.uk/paye/intro-basics.htm This is my take/ opinion/ interpretation...

You can pay cash, cheque, bank transfer etc thats fine but you do need to keep records of who you've paid what.

For each person you 'employ' you need a P45(thats the bit of paper they get when they finish work stating what there tax code is) or you get them to sign a P46(thats where they self declare they have worked this tax year, they haven't worked this tax year and don't have another job or they do also have another job). I have always needed P46s to date its really quick and you either start them of with a full tax allowance for most casual stuff this means you don't have to subtract tax or NI you just do a year end return, which didn't take long at all doing it myself for the first time online.

If they're not working for anyone else you're not taking anything off them if the payments are less than about £100/ wk so you basically are getting them to sign a P46 and giving them a reciept (payslip, which can be hand written so long as it states a few basics details on above website) - copy for your records then once a year filling in who you've paid what

You need to verify they are entitled to work in the UK so you need an NI number, passport, etc theres a list of officialy acceptable docs you can check out via the above link. You need to do this will all employees otherwise you risk people claiming racial abuse.

I struggle a bit with the employ people and cash in hand. If people are willing to do a P46 the paperwork is really minimal and you only need to pay in tax deductions 4 times a year if its under £1500/ quarter your deducting - which I guess it would be. I do my returns online and it takes me about 1/2 an hour every 3 months and about an hour for the year end return. If you employ more that 5 people at one time I think you need to have employers liability insurance. Mines from AXA and costs about £170/ yr - which I guess would vary with the type of work you're in.

The advise lines open long hours and the online element of the website is quite good once you've got your head around what it is you need from it. The inland revenue do run free courses from time to time about setting up a ltd company, employing someone for the first time.

I would suggest you phone and request a new employers pack this will help make more sense of it all - it did for me.

Its all a bit daunting at first its like you need to know what to ask specifically to be able to get the answer to what you need to know! So many new phrases and form codes to make sense of.
Hope this helps

[flowerybeanbag]

in a rush, good post from ANTagony, will be back later with thoughts

[flowerybeanbag]

zog, I'm back. I've woken up from being half asleep earlier. There are ways of doing this relatively painlessly and meeting your responsibilities as well as getting the flexibility you need.

As you are a potential small business owner and therefore someone I would be targeting as a potential client, I can't give you specific advice on how to do it unfortunately - I'm really sorry about that, but I'm sure you understand why that is.

You have been given some good advice so far and some excellent links to look at - hope you get it sorted and good luck with your business.

[zog]

ANTagony, in a hurry so will come back to this later but just wanted to say thank you so much for your post - there's lots of really useful stuff in there and just what I wanted to hear.

flowerybeanbag - what do you do? Whereabouts are you?

[bitofadramaqueen]

My company employs quite a few casual/temp workers and we always put them through as employees. Our tax manager insists on it unless they are genuinely, without a shadow of doubt, able to qualify as self-employed/contractors.

We do have some contractors, but they have a fairly robust contract outlining their obligations in relation to tax/NI/self-employed status etc.

Its not my area of expertise but the HMRC website does say that if you can answer yes to the following questions, the person could be classed as 'self-employed':

Can they hire someone to do the work or engage helpers at their own expense?
Do they risk their own money?
Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
Do they agree to do a job for a fixed price regardless of how long the job may take?
Can they decide what work to do, how and when to do the work and where to provide the services?
Do they regularly work for a number of different people?
Do they have to correct unsatisfactory work in their own time and at their own expense?

You'll probably know it already, but if you do take on casual workers you need to remember they have employment rights too - e.g. all of our casual workers accrue holiday pay based on the number of hours worked.

It might be worth engaging the services of a consultant for a short period of time to make sure that you're all legal and above board.

[bitofadramaqueen]

Sorry, when I said:

You'll probably know it already, but if you do take on casual workers you need to remember they have employment rights too - e.g. all of our casual workers accrue holiday pay based on the number of hours worked.

I meant if you take on casual workers as employees!

[Tortington]

ring ACAS

they help employers too

[flowerybeanbag]

zog I am an HR consultant, based in Cambridgeshire but work with people any location really, advising small to medium sized business. I don't want to turn this into an advert but do contact me on flowery dot beanbag at ntlworld dot com if you want to have a chat.

[gigglewitch]

glad to see there is lots more help coming your way

[zog]

Just come back to this - thanks FBB and everyone else. Lots of food for thought!