Rural employers must be prepared for new payroll legislation which will fundamentally change the way beaters, farm labourers and other casual staff working on estates and farms will be paid, says land agency firm Strutt & Parker.

From April 6 2013, employers will have to submit details of their payroll payments to Her Majesty’s Revenue and Customs (HMRC) by electronic returns under the new Real Time Information (RTI) service. They will have to send details to HMRC every time they pay an employee, at the time they pay them, rather than the year-end as they currently do.

All employees, however temporary, must be entered on the payroll with details of their date of birth, sex, address and National Insurance number – details which in the past some casuals have been reluctant to disclose. However, if they do not provide that information they will not be paid.

Julian Ludlow, associate and head of the bookkeeping team in Strutt & Parker’s Banchory office, said: “A casual’s pay has to be accounted for within the payroll, whereas previously a temporary worker such as a beater was paid cash in hand; it was recorded but rarely inspected. Anyone you pay has to be processed in the payroll and online. If 30 beaters turn up for a shoot, that’s 30 people you have to put on your payroll. They can’t give false information; if they do their submission will be rejected.

“This is really going to be quite a headache when it comes to paying casuals,” he said. “It is going to completely change the way rural employers pay beaters, heather burners, crop pickers, some waiting staff and other casuals whom historically have been paid through quite a disorganised system, albeit above board. This has the potential to make life quite difficult on some estates and I think many have underestimated how difficult it is going to be. Employers must make sure all gamekeepers understand the changes before the start of the 2013/14 season. We need comprehensive details for each beater and false information could result in penalties for the estate.

“In short, if the beater is unwilling to disclose the information required then they cannot be paid. It’s going to be a case of like it or lump it.

“We also need their employment status. If they have other employment, they will be taxed at basic rate. If they are unemployed, HMRC will know they have taken paid work, even if only half a day, and this may affect Jobseekers’ Allowance or any other benefits they might be claiming. This also affects students, who will be taxed as normal employees.”

Mr Ludlow added: “The new rules are meant to simplify the submission of payroll information and ensure that HMRC holds up to date tax information on every employee. This should simplify the starting and leaving process and P35 and P14 forms will become obsolete. Additionally, year-end submissions will no longer be required.

“However, it poses several challenges and anyone handling a payroll needs to make sure they are prepared to deal with the changes. Casual staff are going to have to accept a big change in what is revealed to HMRC.

For advice or further information please contact Julian Ludlow in Strutt & Parker’s Banchory office on 01330 824888.