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Milk Recorders: Employed or Self-Employed

Milk Recorders: Employed or Self-Employed

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Milk recorders have by tradition always been self employed. For those that don't know what a milk recorder does, they attend farms on a regular basis on behalf of the National Milk Records plc and take samples of milk for processing back at the lab. From 1 March 2007 NMR were told to operate PAYE which they did. However, according to the guidance to milk recorders published in their own magazine Scene & Herd throughout 2006 and 2007 NMR do NOT consider them as employees. I quote "The Inland Revenue ruling applies for the purposes of Tax and National Insurance contributions. It does not apply for other purposes, for example employment protection rights." NMR are now also paying mileage using AMAPs and VAT is no longer applicable since "...earnings are milk recorder's income and not business earnings".

I am in the process of preparing my client's self employed accounts (y/e 5/4/07) and 2006-07 tax return. If I accept what NMR say I would continue the self employment and preparation of accounts for future years, completing the s/e pages of the SA100 and entering the tax deducted at source as a tax credit. Unfortunately this could be considered odd and may give rise to a tax enquiry. Although this may help to flush out the true situation but at what cost to the client?

On the other hand I could treat the self employment as ending on 28/2/07 and draw up accounts to a deemed cessation. For the final month treat as PAYE and complete the SA100 employment pages as well.

It would appear the NMR want their cake and eat it. PAYE has been forced upon them but they do not wish to acknowledge the recorders as employees. Let's face it; if a recorder can't work for six months because of an outbreak of foot and mouth, they don't get paid if they're self employed. As an employee they would have employee's rights to regular wages, holiday pay, redundancy, etc.

Research has not turned up anything but I can't believe I'm the only one to have come across this dilemma as there currently in excess of 5000 milk recorders. I am currently pursuing NMR who have said they will phone me back. Any constructive comments would be most useful. Thanks.
Stephen Quay

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By kevin9
25th Sep 2007 16:05

trite humour
I would suggest that the NMR does not have the bottle to treat the recorders as employees. On the udder hand .........

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By NeilW
25th Sep 2007 15:10

It's perfectly possible
There is plenty of cake being had and eaten across industry. HMRC forces PAYE status on directors, agency workers, contractors and freelance consultants. None of that has much influence on employment rights - which is an entirely different canon of law.

It is perfectly possible to be under PAYE and 'not employed' for employment law. It is a disgrace, but that is where we are. There is nothing written that says the law has to be consistent.

From a tax and accounting point of view if the earnings are now employment income rather than trading income, then you should cease the trade. Don't forget to cancel the class 2 NI contributions!

NeilW

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