Pay As You Earn (PAYE) has to be operated by all organisations employing staff. HM Revenue and Customs (HMRC) are the government department responsible for collecting income tax and they provide guidance notes, information and forms on their website.

It is commonly thought that casual staff are people who are not on a permanent contract, but in fact the term “casual” can only apply to someone who works for your organisation for less than a week.

Similarly, there is confusion about the tax position of consultants, contractors and self-employed individuals. The terms used do not necessarily reflect the tax position and you need to check the terms and basis on which they undertake work for your organisation.

Sometimes organisations arrange for their staff to work for a period of time in another organisation under secondment arrangements. This guide also explains how to manage the tax situation.

Volunteers will usually be entitled to claim expenses, but you need to ensure that you pay these under appropriate procedures to avoid an unnecessary tax problem. Special rules have been agreed for volunteer drivers. Small gifts to volunteers and staff will not be taxed.