Occasional trader PAYE implications

booler123

Howdy folks, just a quick one...

I've recently acquired a business that sells fast food at music festivals (I am the 100% shareholder and sole director), and I am hoping to find a way of not having to register as a PAYE employer.

The business will only be doing 3-4 events per year, and it is my intention that any workers I have will either receive no payment from the business (free access to the festival will be the inducement), or will be paid under the £111 weekly threshold.

In both of these scenarios, am I right in saying that I do not have to register with PAYE?

And in the secondary scenario where my workers are paid a small amount, does HMRC have to be formally notified of this? Or is it enough to simply include "wages" as a cost of, say, £1,000 in the year-end accounts?

booler123

Eventually, but I'm not in a hurry to draw it, so depending on how the numbers add up at the end of the year, I'll either pay myself dividends, register with PAYE just for myself, or a combination of both. In fact it's entirely possible the business revenue won't be more than the purchase price of the assets this year, so I may not draw at all.

For now, my immediate concern is what I do with my workers.

And yes, the people who will work for me will not be on a payroll elsewhere... it'll be students.

antrobus

booler123 wrote: »

...In both of these scenarios, am I right in saying that I do not have to register with PAYE? ...

No, as a strict point of law you should register for PAYE.

booler123 wrote: »

...And yes, the people who will work for me will not be on a payroll elsewhere... it'll be students.

Technically speaking, you need to be able to prove that, and obtain and submit P46s etc.

Put it this way; as an occasional trader employing casual workers paying them cash in hand, you can indeed take no notice of PAYE. You will probably 'get away with it', in the sense that HMRC won't see much point in taking it any further for a £1,000. On the other hand, if some PAYE inspector did decide to make an issue of it, they could clobber you for some money.

It's a business risk.

booler123

Thanks for the advice - much appreciated.

But what if they were not being paid at all? Believe it or not, it is actually possible to get people to work stuff like this for nothing because they get access to the festival for free. In this event, is there anything that HMRC have to see?

antrobus

booler123 wrote: »

Thanks for the advice - much appreciated.

But what if they were not being paid at all? Believe it or not, it is actually possible to get people to work stuff like this for nothing because they get access to the festival for free. In this event, is there anything that HMRC have to see?

No payment, no PAYE to worry about.

And I do believe it, BTW.:)

I suppose that, technically speaking, now that they are going to abolish the £8,500 threshold for benefits in kind, it could be argued that 'free access' was a taxable benefit in kind, to be accounted for in PAYE terms as if it were cash. But I would hazard a guess that HMRC would be even less interested, given that scenario, and that the chances of some negative consequences was extremely remote.

martinsurrey

https://www.gov.uk/register-employer/y/no/no/no/no

no need to register as long as you get the employees to sign that this is thier only employment AND you pay them under £111 a week.

fact

martinsurrey

antrobus wrote: »

No payment, no PAYE to worry about.

And I do believe it, BTW.:)

I suppose that, technically speaking, now that they are going to abolish the £8,500 threshold for benefits in kind, it could be argued that 'free access' was a taxable benefit in kind, to be accounted for in PAYE terms as if it were cash. But I would hazard a guess that HMRC would be even less interested, given that scenario, and that the chances of some negative consequences was extremely remote.

benefit in kind is cost to the employer, or the cash and cash equivalent of the benefit.

as the employer is paying nothing (and forgoing nothing) for the staff to be on site that is £nil

as the employee cannot sell their own attendance, that is also £nil

no benefit in kind.

booler123

Thank you for your responses Martin, 'blonde bubbles' and 'antrobus'. I notice on the HMRC link you sent over it says "You’ll still need to keep records of what you pay them". What exactly does this mean?

So is it simply a matter of adding it all up and accounting for it at year end? Or are you required to report to HMRC each time you pay someone?

SeduLOUs

booler123 wrote: »

I notice on the HMRC link you sent over it says "You’ll still need to keep records of what you pay them". What exactly does this mean?

It means you need to keep detailed records of dates and amounts you pay out and to whom, as well as keeping some basic information about who your workers are.

You don't have to send any of it to HMRC, but the records you keep will effectively be your evidence as to why you have not registered for PAYE should HMRC decide to ask questions later on.

The records should show weekly and annual earnings per worker and those earnings should always be below PAYE thresholds, and should also include any evidence of other criteria such as any evidence you have that the workers do not have other employment elsewhere.

Hippy110

Surely free entrance doesn't meet requirement to pay national minimum wage to all workers (even if don't not need to register as an employer)

agrinnall

Hippy110 wrote: »

Surely free entrance doesn't meet requirement to pay national minimum wage to all workers (even if don't not need to register as an employer)

I did wonder about that myself, perhaps the OP could call them interns, employers of all sizes seem to be completely immune from NMW legislation if they do that.