RTI, micro employers and harvest workers

Harvest workers – reporting monthly

 

Farmer with laptop on straw bales_275_202The NFU has previously confirmed with HMRC that the RTI micro employer relaxation could be used by employers with nine or fewer employees as at 6 April 2014, even if they subsequently employ more people during the tax year, for example harvest workers.

This new relaxation for smaller employers may therefore help alleviate reporting difficulties and pressure during harvest for some members.

We have since asked HMRC for clarification over how the micro employer relaxation for RTI reporting, which allows an employer to report on the last payment date in the month, interacts with the RTI reporting of harvest workers.

HMRC has now responded and provided the following information. We understand they will also shortly be incorporating this information into their RTI guidance for employers of harvest workers.
 

Issue 1; I am an employer who qualifies as a micro employer because I engaged nine or fewer employees as at 6 April. How do I show the payments I have made to irregular harvest workers who I engaged on several occasions on a monthly FPS?

The employer must:

  • add all the payments together and report one total pay figure.
  • to avoid tax codes being issued for these employees, include a ‘starting date’ as the date the first payment was made to the employee.
  • include the leaving date as the date the last payment was made to the employee.
  • include the payment date as the date the last payment was made to the employee.
  • report pay frequency as ‘Irregular’.
  • Late reporting reason: You must tell us that you are using the time-limited ‘on or before’ relaxation for micro employers, by reporting reason condition ‘E’, for each employee. However if you report a payment date that is earlier than the date the FPS is to be submitted, you will need to report reason condition ‘G’ - reasonable excuse – as you are reporting after the payment date. If you used the relaxation condition ‘E’ then you might be issued an automatic late filing penalty because you are reporting after the date of payment.

Please see the guidance: PAYE - A relaxation to the reporting arrangements for micro employers (9 or fewer employees) - http://www.hmrc.gov.uk/payerti/transitional.pdf

We will be encouraging micro businesses to adapt their processes to ensure that they are ready to report all payments made to casuals in line with the seven day easement, by 6th April 2016.

We would expect employers who are already reporting payments within the seven day easement period to continue to do so.

Issue 2; I don’t know if I will be picking beyond 29th August when I pay my regulars do I send an FPS then as I may have harvest workers after that & before 5th September, but may not, I won’t know until it happens each day.

You should submit your FPS when you pay your regular employees on the 29th August. You should also include any payments made to ‘casual employees’ in that tax month up to 29th August.

Issue 3 – What do I do in terms of reporting payments to any harvest casuals engaged between 29th August and 5th September?

Any payments made to ‘harvest casuals’ after the FPS has been submitted for the regular employees can be reported within the next month’s FPS. So for the example you quoted; any payments made to ‘harvest casuals’ between 29th Aug & 5th September can be reported when the FPS for the regular employees is submitted for the next tax month – 26th September.