The matter has recently been the subject of Revenue Guidance, where a practice note (eBrief) issued in January 2022 clarified some issues. I understand that, in practice, approximately 50% of operators with the Farm Relief Services (FRS) are classed under class A PRSI, ie employees, while the other 50% are classed under class S PRSI, ie self-employed.
Employment status has implications for:
Revenue Guidance breaks down the type of operators into three distinct categories:
1 Operators who provide labour only
Under the old Revenue Guidance, it provided that these operators are regarded as employees and as such are within the PAYE system of tax deduction. However, Class S PRSI (typically applies to self-employed persons) applies to the income of these operators.
The updated Revenue Guidance, which was issued in January 2022, now provides that for tax purposes, the operators are employees within the PAYE system of tax. It adds that when determining the applicable PRSI class, consideration must be given to the nature of the engagement and makes reference to the Code of Practice on Determining Employment Status. Essentially, this provides that there is no definition of employed or self-employed in Irish or EU law and it depends, to a large extent, on the real nature of the working relationship. Some traits that define an employee include:
Some traits that define a self-employed person include:
The PRSI class applied is subject to the individual operator’s right to seek a decision from the scope section of the Department of Social Protection regarding his or her insurability status. The Department of Social Protection may also investigate the class of PRSI applied to any individual worker. They may be contacted at Tel: +353 (0)1 673 2585 (9am-5pm) Email: email@example.com.
2 Operators who provide equipment only
They are entitled to payment for the hire of equipment gross (without deduction of PAYE/PRSI/USC).
3 Operators who provide equipment in addition to labour
As regards expenses, the Revenue Guidance provides that in the case of operators who provide labour only, it is Revenue’s view that they are employees and in the case of travel expenses they are only allowable where an operator is necessarily obliged to incur such expenses in the performance of his or her duties. Travel expenses to and from work are specifically excluded.
Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors does not accept responsibility for errors or omissions howsoever arising. E-mail firstname.lastname@example.org