PAYE Problems of Casual Workers

HMRC regularly raises questions regarding casual workers and the payment of them (or not!) through the PAYE system.

Getting this wrong can cost a lot in the way of arrears of PAYE going back 6 years as well as interest and penalties.

The word “casual employee” has a specific meaning as far as HMRC are concerned. As far as HMRC are concerned a casual employee is someone taken on for no more than one week and not taken on again in the same tax year. Therefore if someone is taken on for 8 days or 1 day earlier in the year and 5 days later in the year, they are not a casual employee and the PAYE system must be operated. If they are casual workers and they earn less than the PAYE threshold, you just need to keep a record of what you paid them, and their name and address.

However, even if they are casual workers, if the wages payment exceeds the PAYE threshold, a deductions working sheet needs to be prepared and PAYE applied accordingly. A BR or emergency tax code should be applied.

Please note that there are special rules for farmers and migrant workers.

How We Can Help You

The Revenue can be strict in their application of these rules so please ask us for any clarification you require. We can also assist in any disputes with the Revenue over casual employees.

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