Inaugural employment tax and employment status surgeries

19 September 2023      Julia Ascott, Employment Taxes Specialist

We were thrilled to attend and host the inaugural employment tax and employment status surgeries held W/C 11 September. 

Employment Tax Surgery

The first of the new 'surgery' format was held on Tuesday, 12 September. We spent time discussing the thorny issue of volunteers, research participants, vouchers and payments. BUFDG are looking into a few different areas and approaches that may help the sector following these discussions, including taxed award schemes and the £1,000 exemption for general income.

Taxed Award Schemes

Under these schemes, an employer can meet the tax on behalf of third party employees on the provision of any non-cash awards. Universities might therefore be able to gain these schemes to report vouchers to research participants/volunteers. HMRC guidance here states that the voucher remains assessable on the employees, so we will need to look into whether this will still result in changes to individuals' benefit entitlements.

£1,000 trading allowance

The trading allowance exempts trading, casual and/or miscellaneous income of up to £1,000 per tax year from income tax and National Insurance contributions. The £1,000 exemption can be used by individuals within income from 'casual services' with the examples of babysitting or gardening being used. I imagine that HMRC will not provide a definite 'yes' to volunteering being casual services unless there are specific examples provided - we may therefore look to universities to provide us with specific arrangements so we can gain further clarity from HMRC.

We will feedback on the discussion boards and at future surgeries.

Employment Status Surgery

Status software

We discussed the potential tools available such as the Grant Thornton Employment Status Tool, PwC’s Direct Engagement and also IR35 Shield’s CEST checker.

Check Employment Status for Tax tool from HMRC - the only tool HMRC will stand behind (their own!) as long as all the information has been submit accurately

Grant Thornton Employment Status Tool - you can find a demo of the tool, presented at last years' Tax Technology half week. The GT tool makes an assessment of employment status based on a comprehensive questionnaire written in plain language, but doesn't include any due diligence on supply chains. There is an up front cost along with an additional cost per use.

PwC's Flexible Workforce Hub - you can also find a demo of this tool presented at last years' Tax Technology half week. This doesn't include the employments status determination, but does help with due diligence checks (e.g. Companies House) and acts as a repository for all freelancer/contractors/umbrellas/etc information.

IR35 Shield - a free tool that can be used to check your HMRC CEST decision. We have been in contact with IR35 Shield to request a demonstration of their tool for BUFDG members

Specific roles

Members discussed the potential employment status of musicians and performers who might also carry out teaching duties. For example, an employed lecturer who also directs a university theatre productions on a self-employed basis. 

Members will be bringing more musician and performer arrangements to the next surgery to discuss further and we will talk through the Film & Television guidance, often referred to as Appendix One, which sets out the likely employment status of occupations in the entertainment industry.

Next sessions, waitlists and cancellations

Our next Employment Tax Surgery is on Wednesday, 29 November (10.00am to 11.00am) and the Employment Status Surgery on Monday, 27 November (10.00am to 11.00am).

Sessions are limited to 30 members per event. This is so that all attendees have the opportunity to share information, ask questions, etc within the hour timeframe.

Where sessions are full, you can still book onto the waiting list - you might receive information on the event, but please do ignore this unless you are sent the joining instructions letting you know that you have been taken off the waitlist and invited to the session.

If you book on and cannot attend for any reason, please remember to cancel your booking or contacting so that those members on the waiting list can be offered your place. You will be contacted the day before each session with the joining instructions for the events and to remind you to cancel if you are unable to attend.

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