Accommodation For Agricultural Workers

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Farmers who provide accommodation to their employees need to make sure that the rates they charge their workers do not push wages below National Minimum Wage or Agricultural Minimum Wage.

If accommodation is provided to workers, the offset rate as provided by HMRC is £6.40 per day or £44.80 per week from April 2017.

If an employer charges the employee more than the offset rate, the difference is taken off the employee’s pay which will lower their wage and it could fall below minimum wage.

If the accommodation is free, the offset rate is added to the employee’s pay increasing their wage.

However, charging below the offset rate will have no effect on the pay.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

HMRC Agricultural Compliance Checks

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In the rural sector, employers are being urged to check that they are paying the correct minimum wages rates where both the Agricultural Minimum Wage and the National Living Wage apply.  HMRC has launched a programme of compliance checks to ensure the correct rates are being paid and can ask to see any associated records.   This applies to workers in horticulture, agriculture and could include other areas such as, for example, beaters, housekeepers, temporary staff and casual labour.

The Rules

Wales – Agricultural workers must be paid the higher of the Agricultural Minimum Wage or National Minimum Wage

England – Agricultural workers must be paid at least National Minimum Wage unless they signed a contract before 1 October 2013 which entitles them to Agricultural Minimum Wage.

Agricultural Minimum Wage is dependent upon the employee’s job grade and category. Further information can be found on the HMRC website.

Exemptions

Family members who live at the home of the employer and help out with chores or participate in the running of the family business do not qualify for the minimum wage.

However, if your business is a limited company this is a separate legal entity and cannot be considered to have a family or a family home so the minimum wage rules still apply to all employees.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Auto Enrolment For Farmers

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Farmers face fines if they don’t adopt the new workplace pension rules. The Government has brought in to place a new scheme called Auto Enrolment in which all employees must be enrolled in a workplace pension scheme. The Pensions Regulator says that over 1,000 employers were issued with fines of £400 for failing to comply with the scheme in the final quarter of 2015.

You cannot “encourage” your staff to opt out of the scheme as this will also be penalised.

The scheme applies to:

  • all employees aged over 22 and under state pension age.
  • Employees earning more than £10,000
  • Includes family members who are employed on the farm – and migrant workers
  • Part time workers can ask to be enrolled in the scheme

You should have received a letter 12 months before your staging date.

Here at Green and Co we are already providing an Auto Enrolment service for a number of our clients.

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Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

mage courtesy of jscreationzs at FreeDigitalPhotos.net

 

Happy Holidays From Green & Co

20151218_133025232_iOS.jpgAs we take our Christmas break at the end of another productive year, we would like to take this opportunity to thank you, our loyal blog readers! Whether you are already a client, a prospective client, or just like to read our informative articles each week, it is you who keeps this blog going.

Working with our clients in 2015, has also helped to grow Green & Co’s services, allowing us to assist our clients in both setting and achieving their goals. Our services span from general accounts to business goal setting and much more…

  • Year-end and management accounts
  • Tax returns and tax planning
  • Auditing
  • VAT and bookkeeping
  • Payroll (Including Auto Enrolment)
  • Construction Industry Scheme (CIS)
  • Sage Training
  • Business forecasting and goal setting
  • Exit strategies
  • Profit improvement
  • Profit extraction
  • Corporate re-structuring
  • Inheritance tax review and estate planning
  • Virtual office services

Green & Co also specialise in accounting for a number of fields:

  • Doctors
  • Property developers
  • Independent financial advisors
  • Solicitors
  • Insurance brokers
  • And of course, farming!

If you would like to know any more about any of the above, please give our friendly team a call on 01633 871122 once we are back from our Christmas break – refuelled and recharged to combat another year together!

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Changes to Agricultural Minimum Wage on the Horizon

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Farm workers in Wales are set to receive a 6% pay rise by the end of this year, following the introduction of an interim Agricultural Wages Order for Wales.

It will be the first pay rise of its kind since the abolition of the Agricultural Wages Board in 2013, and will represent an annual wage increase of 2% between 2012 and 2015.

Workers on Grade 1, the lowest pay grade, will be paid at 2p above the current national minimum wage of £6.70, and this will apply to all workers over 16.

The new order is an interim measure until a new advisory panel is set up and, hopefully, fully operational by early 2016. Its aim is to ensure fair wages, combat skills and labour shortages, and offer a more attractive career path to young workers.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of jscreationzs at FreeDigitalPhotos.net

Employing Casual Harvesters & Beaters

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Farmers are being reminded by HMRC that they must ensure that they comply with the rules when employing casual workers for harvesting and shoot beating.

Firstly –  you must ensure that individuals are eligible to work in the UK by requesting the relevant documentation, checking and taking copies for your records.  There are stiff penalties if one of your workers is found to be illegal and you did not check their papers.  Details of how to find out an employee’s eligibility can be found here.

Secondly  – you must pay the workers through PAYE if:

  • They work for you for a period of over 2 weeks OR
  • They work on any other activity other than harvesting or beating OR
  • They are family members.

You may not have to deduct tax if:

  • They work for less than 2 weeks, AND
  • They have not worked for you since 6 April of the current tax year.

OR

  • They work for you for 1 day or less, AND
  • You pay them off at the end of the period, AND
  • They have no further contract of employment.

(Note in both cases, the pay is still taxable income, but it is up to the individual to ensure any tax due is paid over.)

National Insurance must be applied as normal to casual harvesters and beaters where earnings for each job exceed the Secondary Threshold (for employers) or the Primary Threshold (for employees).

In ALL cases, whether or not you apply deductions of tax and NI, you must keep a record of workers for at least 3 tax years following the employment and these details reported under RTI rules. This should include full names and addresses, date of birth, gender, NI number and how much you paid them.

If you have any doubts about how to pay your casual workers this summer, please contact us.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

How Accountants Can Save Farmers Time and Money

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Accountants can be a valuable asset to those running a farming business. At Green & Co we understand that you want to spend your time doing what you enjoy and what you do best. This is where we can help: by providing a tailored level of support to you and your business. There are various ways in which we can help ease the burden of compliance with regulation. Our bookkeeping department can keep your records up to date, or we can prepare accounts and tax returns from records prepared by yourself or your own bookkeeper.

The rules relating to compliance with accountancy and tax law can be extensive and daunting; as accountants we have detailed knowledge of these rules and it is our job to ensure that your business’ records and returns comply with these. We will ensure that returns are filed prior to filing deadlines, avoiding the potentially high cost of fines, penalties and interest that will arise if these deadlines are missed.

There are also many methods of minimising the tax bill of the business that are specific to farming businesses. Green & Co have 20 years’ experience acting on behalf of farming clients and always ensure that all relevant reliefs are taken advantage of, minimising the cost of taxation to you and your business.

Whatever your level of business knowledge, Green & Co are here to help guide you through the world of accountancy and taxation rules. If you would like assistance with your business, from record-keeping, VAT returns and payroll, to accounts preparation and submission of tax returns, please contact us to arrange a consultation.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Free SAGE Seminar: RTI & Auto Enrolment

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Seminar Agenda:

9:00 – 9:30am Registration, coffee and biscuits

9:30 – 9:45am Introduction and welcome

9:45 – 10:45am Presentation by James Sponder of Sage

10:45 – 11am Q&A session

11:00am Finish

Come along and discover how to get the most out of your Sage package. Reserve your place on this free seminar by phoning 01633 871122, or email katie.williams@greenandco.com

For further information relating to the workshop, contact Jane Wootton on 01633 833507, or email jane@greenandco.com

Employment status: Get it Right

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Employment status has always been, and will no doubt continue to be, a contentious issue for HMRC. Whether an individual is employed or self-employed is not a matter of choice and employers and contractors must ensure that they are engaging workers under the correct contract. An employee will have a contract of services, whereas a sub-contractor will have a contract for services. It is vital to classify your workers correctly as, along with other factors, this will determine the  tax and national insurance treatment which they are subject to. For example, employees can attract an employer’s national insurance liability, whereas a self-employed person will not. HMRC can carry out a status enquiry if there is any doubt surrounding the status of workers and demand reimbursement where they find an incorrect contract is in place.

In order to determine the ‘reality’ of an individual’s status, HMRC have set out certain criteria which can enable a decision. For example, do workers provide their own equipment, can they decide their own working hours, can they send a substitute in their place and do they bear the financial risk.  Other considerations include: entitlement to statutory payments, length of engagement and the existence of a mutuality of obligations. This is not an exhaustive list however and the rules can differ across industries.  If ever there is any doubt on the status of your worker, advice must be sought.