Casual Labour

Lisa BrookLisa Brook New MemberRegistered Posts: 10
Hi

It's my first time so feeling a bit nervous. :001_unsure:

This evening I've taken on my fourth client who is a Motor Trader. Coming from a Motor Trade background myself I thought I would be able to answer all his questions. One that I have struggled with is that I have not come across casual labour in my job.

His question is that two or three times a month he asks a friend to help him pick up cars from the local auction. He gives them £20/£30 cash depending on how many cars they have to collect. Can he put this cost through the business as casual labour?

Many thanks


Lisa

Comments

  • farmergilesfarmergiles Font Of All Knowledge Registered Posts: 1,693
    Lisa Brook wrote: »
    Hi

    It's my first time so feeling a bit nervous. :001_unsure:

    This evening I've taken on my fourth client who is a Motor Trader. Coming from a Motor Trade background myself I thought I would be able to answer all his questions. One that I have struggled with is that I have not come across casual labour in my job.

    His question is that two or three times a month he asks a friend to help him pick up cars from the local auction. He gives them £20/£30 cash depending on how many cars they have to collect. Can he put this cost through the business as casual labour?

    Many thanks

    Lisa

    Hi Lisa, no need to feel nervous, we don't bite....:lol::lol:

    If it was a client of mine I would ask them to "Self invoice" for this and treat it as "Vehicle Delivery" (I hate the term "Casual labour")
    Keep a duplicate invoice book and raise an invoice every time that "Fred Bloggs" delivers cars. get FB to sign for the cash.
    Enter on the invoice that "FB is responsible for their own tax & Nat.ins. and is responsible for informing HM R & C of their self employed status". FB is only used on an irregular self employed basis and cannot be classed as an "Employee". If "FB" was on holiday or otherwise occupied, your client would have to find another self employed vehicle delivery person.

    This covers the extraction of the cash from the business, covers the client for the payment to "FB" and advises "FB" of their status. It does not imply a contract of regular employment and should satisfy any inspection by the Revenue "Employment police"!

    This is my view on this and possibly one of my learned friends may have a different opinion.

    Kind regards
    Peter
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    "Casual" and "cash" are so annoying! :lol:

    I would agree with Peter in principle - create some paperwork for it.

    However, I would not be sure that HMRC will be satisfied that Fred Bloggs is self employed. And remember that if they do deem him to be an employee, they will come after the deemed employer for back taxes - they will take the cash paid as net and gross it up. Not so much on the amounts you're saying but normally this can get very expensive.

    There are various tests to determine if a person is employed or self employed, and employment status is a matter of fact, not a choice.

    Get a contract put in place that protects both worker and business.
  • farmergilesfarmergiles Font Of All Knowledge Registered Posts: 1,693
    faerie9 wrote: »
    "Casual" and "cash" are so annoying! :lol:

    I would agree with Peter in principle - create some paperwork for it.

    However, I would not be sure that HMRC will be satisfied that Fred Bloggs is self employed. And remember that if they do deem him to be an employee, they will come after the deemed employer for back taxes - they will take the cash paid as net and gross it up. Not so much on the amounts you're saying but normally this can get very expensive.

    There are various tests to determine if a person is employed or self employed, and employment status is a matter of fact, not a choice.

    Get a contract put in place that protects both worker and business.

    I agree with your views but if "FB" were to invoice direct as "FB Car Delivery Services" then this would negate the need for a contract (the invoice would be the contract) plus it would imply that "FB" was running their own car delivery business and thus be a possible source of new business for Lisa!
  • carolcarol New Member Registered Posts: 13
    Hi Lisa hopefully going to be doing the same myself - book-keeping for motor trader later this year. Never worked in the industry myself although worked for "engine Repairers" before. Any ideas on a system for producing an invoice for the customer. My only thought would be to allocate time and parts on a job card (by hand - mechanic) and from there auto produce the invoice through Sage, what do you think? Need to keep it simple and with minimal costs. Realise job card method is only as good as the mechanic remembering to put all the parts down.:001_smile:
  • Hasan.AhmetHasan.Ahmet Feels At Home Registered Posts: 87
    Casual Labour

    Lisa asked
    "His question is that two or three times a month he asks a friend to help him pick up cars from the local auction. He gives them £20/£30 cash depending on how many cars they have to collect. Can he put this cost through the business as casual labour?"

    If his friend was doing the same work for other garages he would have a badge of a trade of delivering vehicles.

    If he has a first employment elsewhere and does this only for your client in his spare time, this would be his second sessional pt employment.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    I agree with your views but if "FB" were to invoice direct as "FB Car Delivery Services" then this would negate the need for a contract (the invoice would be the contract) plus it would imply that "FB" was running their own car delivery business and thus be a possible source of new business for Lisa!

    As the Dragonfly ruling proved, the contract has to reflect the facts. You can construct a sole trade business for FB but if HMRC dug deeper, it would have to hold water and not just be a flimsy cover for what might actually be employment (eg, does he actually do this for other people as a business?).

    I know I keep banging on about this but we've come across this a fair bit recently and it's important to get it right!

    Hasan's right, it could go either way dependent on the facts of the arrangement.
  • groundygroundy Trusted Regular Registered Posts: 495
    If the friend registered as self emplyed and invoiced for his work then I am sure it would be easy to satisfy self employed status based on mutuality of obligation and substition (providing substition exists).
  • Lisa BrookLisa Brook New Member Registered Posts: 10
    Hi

    Thank you for all your replies. I will go back to my client to get a bit more information and I can discuss the best way to go forward. Feeling more confident about the subject now. :001_smile:
  • Lisa BrookLisa Brook New Member Registered Posts: 10
    Hi Carol

    Is it just servicing and repairs or will it be car sales as well.
  • carolcarol New Member Registered Posts: 13
    Hi Lisa it will be car repairs and MOT station. Just looking for a company name that would suggest quick service etc. Any help appreciated.
  • imeldabyeimeldabye Well-Known Registered Posts: 147
    Just on the casual labour topic can I ask your advice? A new client is setting up a business selling coffees from a mobile van. Her regular trade she will service alone but she plans on doing day events eg fun runs, school fairs etc and at some of the events where she cannot work them for one reason or another she will employ a student/au pair to do it. It will be on an ad-hoc basis. What is the procedure for her vis a vis payroll/paye/nic?? Needless to say she is keen to avoid red tape and/or additional cost to her business!
    thanks!
  • groundygroundy Trusted Regular Registered Posts: 495
    They would be employees that would need to complete a P46 or P38S (if student). In the case of an au-pair or someone who is employed elsewhere then basic rate tax must be deducted.
  • Lisa BrookLisa Brook New Member Registered Posts: 10
    Invoicing

    Hi Carol

    I work at a main dealer unfortunately our management system has been designed by our Chairman. We do however have an Express Fit side which is not integrated with the management system and it is called CAM System Ltd.
    We pay quarterly. It allows the Technician to create a customer, issue parts and labour and raise an invoice. They run a end of day which I then input the sales manually onto the main management system. Once they have good received the stock onto CAM I put all stock invoices into a stock account and then with the month end summary put through a journal credit stock account debit purchases. The Cam System can provide marketing a stock report basically any report you wish. I can give you there number.

    I have a client that has just changed his invoicing to an online method WWW.computerdoc.co.uk/auto each times he wants to create an invoice he just logs on.

    I'm not sure if this will help but good luck.

    a name "Express Servicing" - "Rapid Auto Repairs"

    Lisa
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