1. An employer?s lot is not a happy one:?Employers must not only pay workers a fair wage for a fair day?s work, but provide workplace pensions, welfare and more. You also have to act as unpaid tax and NI collectors by operating the increasingly complex PAYE system. An error that means you collect too little tax or NI being can leave you footing the bill.
2. Different rules and concessions:?HMRC used to take a more relaxed approach to casual workers where they were employed for a week or less. However, currently the only concession is for short-term harvest workers and beaters for shoots.
3. Not enough time:?When you employ someone for a matter of days or weeks, for example a student in the holidays, the chances are they won?t have a P45 from a previous job. So you should give them the usual ?starter checklist? to complete to establish the correct code to operate.?When you pay an employee, temporary or otherwise, who hasn?t given you a P45 or starter checklist, don?t make the common mistake of using the emergency code to work out their tax. You must use code BR, or insufficient tax will be collected and HMRC is likely to ask you to pay the shortfall.
4. Net pay arrangements:?Another trap is agreeing a cash-in-hand amount of pay. This can cost you more than you might think.?Example: Acom takes on a student for temporary work. It agrees to pay him ?50 in their hand, per day (which meets the minimum wage requirement). It pays the student for two weeks, i.e. ten working days, but the student then leaves before completing the starter checklist. Acom must account for tax on the employee?s pay using code BR. To arrive at the ?50 per day it has paid, it costs Acom ?730 (?73 per day) for the two weeks. This means the PAYE tax and NI has cost Acom almost half as much as the pay.?Note:?Had Acom obtained the starter checklist it could have operated an emergency code, which would have reduced its cost to just over ?580.

Tips

1. Since the introduction of RTI, the golden rule is that, apart from harvest workers/beaters, you should tackle PAYE for casual and short-term employees in the same way as for permanent staff. This includes notifying HMRC of their starting and leaving details on a full payment submission (FPS).
2. Ask all new starters – whether casual or not – to fill out a starter checklist as one of their first tasks on day one. It only takes a minute or two.
3. Avoid cash-in-hand pay. Use normal pay arrangements for casual workers to avoid unexpected tax and NI costs.
4. For PAYE/RTI purposes, treat all short-term casual employees as you would full-time workers. Issue them with a starter checklist and get them to complete one at the start of their first day. A special rule for casual harvest workers applies. Avoid cash-in-hand payments as these can increase your overall costs.