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Where Taxpayers and Advisers Meet
HMRC revise guidance on agricultural workers
02/01/2007, by Sarah Laing, Tax News - Business Tax
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In conjunction with the accession of Bulgaria and Romania to the European Union, HMRC have issued revised guidance for employers highlighting changes to the Seasonal Agricultural Workers Scheme (SAWS).

Everyone will no doubt be aware that Bulgaria and Romania joined the European Union on 1 January 2007. For employers, this means that places on SAWS are now available to non-students from Bulgaria and Romania. Applications from other countries remain restricted to students.

For income tax purposes, the P38(S) procedure is only available where the individual is a student and meets the relevant criteria (as set out in Section 4 of booklet CWG2: Employer Further Guide to PAYE and NICs). Employers should therefore not assume that all SAWS participants meet the necessary requirements. Non-students from Bulgaria and Romania are subject to the standard PAYE treatment.

For national insurance contributions purposes, students from Bulgaria and Romania working on the SAWS scheme are no longer eligible for the 52 week exemption from payment of NICs. For both students and non-students from these countries NIC operates as for all other employees.

Employees on the SAWS scheme are not eligible for the special PAYE and NIC concessions for harvest casuals (also set out in Section 4 of booklet CWG2).

Substantial penalties exist where businesses employ workers illegally, and new penalties were introduced from 1 January 2007 relating to Bulgarian and Romanian nationals that effect employers as well as employees.

In May 2004, the Home Office strengthened the lists of documents employers should check to establish whether a job applicant is entitled to work in the UK. The maximum penalty for the offence - previously £5,000 - was increased to an unlimited fine. This amount is payable for each person found to have been employed illegally, and on indictment.

Most prosecutions are currently dealt with in the local magistrates' court - or the sheriff courts in Scotland, but since 2004, more serious cases can be heard in the Crown Court.

In addition to existing measures, new legislation has been passed that will introduce civil penalties as an appropriate means of tackling negligent recruitment practices and encouraging employer compliance. To help tackle rogue employers, there will also be a tough new specific offence of knowingly employing an illegal migrant worker, which will carry a maximum 2 year custodial penalty.

The Immigration Service will also seek to remove any person found to be working illegally in the United Kingdom.

Sarah Laing
Editor, TaxationWeb News

HMRC: Changes to the Seasonal Agricultural Workers Scheme (SAWS)
Employing migrant workers

About The Author

Sarah Laing
Editor, TaxationWeb News

Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences).

Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession.

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