Ad hoc payments to interviewees - to payroll or not?!

Monsoon

I've come across a situation where a business gives its interviewees a few hours "trial run" to see if they are suitable for the job. If they aren't, he gives them some cash (say £30) to say thanks for your time, and that's it. Sometimes all he knows is their first name, in some cases he might have a CV.

My gut reaction to this was that P46 procedures need following, but it's not an employment, it's an ex-gratia (I think) payment. Is it really necessary to do a P46 and then a P45 the same day? Or is it classed as "other" income for the interviewee who should self-declare it? For some reason, I can't get my head round this one.

Monsoon

Ah-ha!
http://www.hmrc.gov.uk/paye/employees/start-leave/special/temps.htm

BCASL

I was at an HMRC workshop a few years ago, at HMRC Bush House in London. Whilst I was there an HMRC representative asked if I would take part in another trial whilst I was there, I said "no problem". I took part in the trial, when it finished the person said, we would like to thank you for your attendance, they gave me an envelope and asked me to sign for its contents - it was £50 cash for "travel expenses" - I was gobsmacked that this happened in and HMRC building in front of HMRC people, who didn't bat an eyelid!

Monsoon

BCASL wrote: »

I was at an HMRC workshop a few years ago, at HMRC Bush House in London. Whilst I was there an HMRC representative asked if I would take part in another trial whilst I was there, I said "no problem". I took part in the trial, when it finished the person said, we would like to thank you for your attendance, they gave me an envelope and asked me to sign for its contents - it was £50 cash for "travel expenses" - I was gobsmacked that this happened in and HMRC building in front of HMRC people, who didn't bat an eyelid!

OMG. That's.... just......... that's .......... OMG.

deanshepherd

Nowt wrong with that.

I assume you declared it on your tax return..

payrollpro

Monsoon,

HMRC have a category referred to as "casual worker" and if the employer satisfies the criteria then there is no requirement to place them on the payroll, file any forms or include them in the annual return, soon to be pay period by pay period returns!

If it is a single payment, less than the NIC weekly LEL of £102 and hence much less than the standard personal allowance for a week then there is no requirement to do anything other than pay them. Even if you get a P46 there is no requirement to file it, in fact you are instructed not to. The problem comes from the fact that such people would automatically tick box C, would they not? Also, if you don't get a P46 does that not mean BR applies anyway?

As soon as a second payment is made in the same tax year then full PAYE procedures apply, though until they reach the LEL there is no requirement to file the P46.

If HMRC are happy to apply this to small payments they make, then we are allowed to do the same for our clients. It is the P46 rules which worry me on these types of payment. Also, Dean is right, this does not absolve the taxpayer from the responsibility to declare the income.

Payrollpro