Employer not paying TAX or NI.

Aaron C Rescue

I have a friend who is yet to receive her P60, did not receive one last year, is never provided with a payslip, and has never been told how much she earns in the two and half years she has been there. She says her boss has 'boasted' that he never pays any tax. She is worried that the boss may claim she was working on a self employed basis, was responsible for her own tax and NI, and that she may be landed with a very large tax/backdated NICS bill, as well as being concerned about receiving her NI credits.

I suggested to her that she have a word with the accountant/bookeeper. She advises me that they used to have a woman come in once a month to do the books, but who hasn't been in since late last year. She has been informed by the boss that he now does the wages, NICS, and Tax etc.

I have been able to reassure her that due to the fact that has she solely worked for him, at one office, for over two years, and has never submitted an invoice for her services, he will not be able to claim that she was working on a self employed basis, as she simply would not meet the criteria.

Obviously alarm bells are sounding to her so is anyone able to offer any advise regarding what she should do and whether or not the unpaid NICS and Tax is her responsibility?

Many thanks

Caspar

Employer not paying Tax/Ni

Hello
If her employer is not paying over any tax/NI and not submitting any End of Year Returns, your friend will be missing out on her NI contribution for SSP and also for calculation of her years entitlement to the old age pension in retirement. However, she will not be held responsible for any payments due, as she has been paid NET.

I know that when a company recently went into liquidation, and had non payment of PAYE to HMRC, I was informed, that the company has to provide a P35, and the revenue adjust the figures to make up the contributions, as it is not the employees fault that the employer has not paid these over.

She is in a difficult situation, as she does not want to lose her job, but if she doesn't do something, it will be detrimental to her in the long run.

I would suggest that she speak with her employer again, mentioning her cause for concern over the potential ramifications of his non-payment of her tax/NI, and ask him to provide the documents himself, or give him the ultimatum that she will approach the tax office for copies. (Which of course may not have been submitted).

In this instance, he can obtain P35's for previous years completion, and will have to stump up any fines they may levy on him for getting this information in late.

Should your friend have to make the call, the tax office will follow this up with a letter asking him for the information. So one way or another the matter should be resolved.

Hope this is of help
Regards
Caspar

Monsoon

Aaron C Rescue wrote: »

Obviously alarm bells are sounding to her so is anyone able to offer any advise regarding what she should do and whether or not the unpaid NICS and Tax is her responsibility?

Many thanks

Ringing here too! I can't stand employers who don't pay over tax and NI.

It is NOT her responsibility to pay the tax and NI, it is the employers. If I was her I would go straight to HMRC and ask them if an employment is registered against her NI number and if contributions are being made on her behalf.

As Caspar said, it's tricky as she doesn't want to lose her job (and he cannot dismiss her for this, it would be unfair dismissal) but she can't let this go on.

I think talking to the employer is a non-starter - she's tried and never gets anywhere. I'd be inclined to enquire of HMRC first, which avoids the tricky situation of telling the employer "paperwork or else". If she is not the only employee, then if HMRC come a-knocking then he can't know what triggered it, which protects her somewhat.

Is the employer a Ltd Co? Worst comes to the worst, he could just fold the company and walk away. Again, if HMRC make an assessment of tax due before this happens, it becomes another unpaid debt and the NI etc would be credited against her NI number. If he vanishes before anything is discovered/ submitted, it might be more tricky and I don't have experience of the specifics here.

Good luck and let us know how she gets on.

blobbyh

Monsoon wrote: »

Ringing here too! I can't stand employers who don't pay over tax and NI.

Fair enough but in my previous job, we didn't pay over any PAYE or NI for six months until eventually we became insolvent. The funds become part of cash flow used to pay employee wages. I think given the choice - and employees obviously aren't - most workers would still happily be paid their wages oblivious to everything until the company inevitably folds rather than knowingly be out of work much earlier through the company simply adhering to "doing the correct HMRC thing".

In that position, the company will almost always do everything it possibly can to protect itself and it's workers, whether following the correct action or not.

Monsoon

blobbyh wrote: »

Fair enough but in my previous job, we didn't pay over any PAYE or NI for six months until eventually we became insolvent. The funds become part of cash flow used to pay employee wages. I think given the choice - and employees obviously aren't - most workers would still happily be paid their wages oblivious to everything until the company inevitably folds rather than knowingly be out of work much earlier through the company simply adhering to "doing the correct HMRC thing".

In that position, the company will almost always do everything it possibly can to protect itself and it's workers, whether following the correct action or not.

Robert I agree, it's the fact that the OP isn't getting payslips, P60s etc, which suggests that the employer isn't even on the system. In the situation you describe, the employees are safe both in terms of wages and tax, if the employer is declaring the liability, even if they can't afford to pay it. It's when employers just plain don't register as an employer, or deduct monies from pay with no intention of ever handing it over (and not telling HMRC they should be), that's what gets up my nose.

Commercial cash flow issues are one thing. Tax evasion is something else entirely, that's what I was getting at

snowmarauder

I suggest telling her to have a sneaky peak to see which tax office he is accountable to and ask them is she is registered there.