PAYE23025 - Employer records: employer types: farming - harvest workers
This subject is presented as follows
Background
Some farmers take on large numbers of workers at harvest time. Some of these casuals
- Turn up for work without prior agreement
- Receive piece work payments
An arrangement was reached between HMRC and the National Farmers' Union (NFU), with effect from 6 April 1984, which clarified how farmers should operate PAYE for these ‘harvest casuals’. This agreement should ensure that a common line is taken by both
- Employers
- Processing Offices
The NFU's letter to its members (Word 31KB) dated 29 February 1984 set out the guidelines to be operated.
The agreement does not affect the way in which the employer record is treated. If you are required to set up a new employer record for a farmer you should create the record with a P scheme type in the usual way. Follow the guidance in the Action Guide 'P Scheme' PAYE20136.
The agreement
The agreement between HMRC and the NFU
- Applies to payments made to irregular harvest worker (Word 24KB) casuals taken on for short periods
- Does not apply to casual employees who are members of the farmer's family
Relates only to this specific area of work and does not change the PAYE rules for any employees outside its scope
Applies to all harvesting employers, not just those within the NFU, and must be followed for
-
- Farming employers
- Farming activities of limited companies
-
- And
- And
-
- Market gardeners
PAYE & NIC treatment
The following table explains how certain types of workers are to be treated under the agreement between HMRC and the NFU
Workers |
Period of work |
PAYE Treatment |
NIC Treatment |
Daily casuals |
One day or less. Paid off at the end of that period. No contract for further employment |
Do not deduct tax. Keep a record of the employee's name, address and amounts paid. Enter the details on form P38A at the end of the tax year |
The usual NIC procedure applies |
Daily casuals |
Several days in a week. Paid less than the NICs lower earnings limit |
Do not deduct tax. Aggregate the payments made in the week. Enter the details on form P38A at the end of the tax year |
Do not deduct NIC. Aggregate the payments made in the week. Enter the details on form P38A at the end of the tax year |
Daily casuals |
Several days in a week. Paid at or more than the NICs lower earnings limit |
Do not deduct tax. Complete form P11 recording the employee's name, address and total amounts paid in the week. Enter 'NI' in the code space on form P11 |
The usual NIC procedure applies. Enter 'NI' in the code space on form P11 |
Students |
Only during their holidays |
The usual P38(S) procedure applies |
The usual NIC procedure applies |
Other harvest workers who produce no form P45 |
Taken on for over two weeks |
The usual P46 procedure applies |
The usual NIC procedure applies |
Other harvest workers who produce no form P45 |
Taken on for two weeks or less and paid less than the NICs lower earnings limit |
If the farmer has already paid this worker above the threshold for a previous similar period during the year the usual P46 procedure applies Otherwise Do not deduct tax. Keep a record of the employee's name, address and amounts paid in the week. Enter the details on form P38A at the end of the tax year |
Do not deduct NIC. Enter 'NI' in the code space on form P11 |
Other harvest workers who produce no form P45 |
Taken on for two weeks or less and paid at or more than the NICs lower earnings limit |
Do not deduct tax |
The usual NIC procedure applies |
Other harvest workers who produce no form P45 |
First short period extends beyond two weeks |
The usual P46 procedure applies as soon as the farmer knows the period will exceed two weeks. This should be applied by the third week's pay day at the latest. The concession still applies to pay for the first period. The farmer should omit this from the Deductions Working Sheet except where NICs were due |
The usual NIC procedure applies |
Records
Farmers must keep sufficient records of all payments to show that
- The payments made to casual employees were within the agreement
- They have applied PAYE where appropriate
- If PAYE has not been applied they are able to make a return showing the
-
- Name
- Address
-
- And
- And
-
- Amount paid to each casual employee
Advice
Although you must clarify if required what records the farmer should keep, and if necessary suggest ways of keeping the records, it is for the farmer and his agent to decide how to do this.
Worker claims to be self-employed
You must tell the farmer that his harvest workers are unlikely to be self-employed although they may claim to be. If the farmer refers a specific case for confirmation, the facts of any such claim must be tested.
Examples of farm workers who clearly are self-employed include
- An agricultural contractor who uses his own equipment to do threshing, haulage and so on
- A person who receives payments for a team but is not an employee of the farmer, such as gangmasters or leaders of itinerant groups of workers
In such cases the farmer need not apply PAYE but must record
- The name and address of the person who receives the payments
- The amounts paid
Where a farmer claims to be unable to work within the terms of the arrangement try to solve any problems locally, but if this is not possible refer the matter to
PSN PAYE Technical
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)(This text has been withheld because of exemptions in the Freedom of Information Act 2000)(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
You must not enter into any new arrangements. Any existing local arrangements, in writing, which go beyond the present National Farmers' Union arrangement should be ended as they come to light.
