What if your employer lies to tax office

I am stuck in a bit of a catch 22 situation that I thought I would share.

Last year my employer just stopped paying me salary. I took him to an employment tribunal which found in my favour. My employer however had no intention of ever paying me and the company is now in administration.

In the meantime, the person who kept the accounts filed a P45 with my salary AS IT SHOULD HAVE BEEN.

When I sent in my income for tax credits, I explained this. I also phoned up to explain that there would be a discrepancy. I was told 'that won't be a problem'.
Of course it was a problem and HMRC wrote back. I called again and was told to send bank statements as evidence. I sent this and also my employment tribunal award. HMRC replied that this was 'insufficient evidence'. (even though it was exactly the evidence that they had asked for!).
Nevertheless HMRC has decided that they are still going to reduce my tax credit award.
Even the person on the tax credit helpline agreed that this was doubly unfair. I am of course writng for a mandatory reconsideration and will persue this. I have called the tax office a number of times to ask them if this is not a problem - that the tax amounts are wrong - but they don't seem concerned.
The company administrator is very unhelpful and unlikely to be of any help as he hasn't been paid either!

Doesn't it seem ridiculously unfair though that not only did I not get paid but then I also get penalised again because my (pretty crooked) employer lied? In the meantime, my former boss is not being penalised in any way as it was a limited company. Is there something I am missing here? Or are things really this stacked against employees and in favour of corrupt company directors?
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Comments

  • Mersey_2
    Mersey_2 Posts: 1,679 Forumite
    Complain via HMRC (there's an online form). Although keep it brief as it only allows 1000 characters ie including spaces.
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
    edited 8 October 2016 at 10:47AM
    HMRC will only care from the tax side of things if the tax/NIC hasn't been paid.

    Not fair obviously but from a tax credit side, they have no authority to question your employer.

    Wonder if you could manage to report it via a failure to pay NMW.
  • Mersey_2
    Mersey_2 Posts: 1,679 Forumite
    HMRC will only care from the tax side of things if the tax/NIC hasn't been paid.

    Not fair obviously but from a tax credit side, they have no authority to question your employer.

    Wonder if you could manage to report it via a failure to pay NMW.



    I'm not sure that's quite right - but I agree the lower grade staff may not think they can.


    I recall during the Select Committee evidence session re Sports Direct and so on, this was raised and the senior civil servant said HMRC & the DWP can investigate RTI where concerns are raised that it is fake/inaccurate.


    It may therefore need an MP's intervention to get it resolved.


    But yes, good point re the NMW - this was mentioned yesterday on the News as you might have seen, where another large warehouse-type employer was involved in practices including deducting pay or holding it over to year end, whereas they cannot do this by law (including the NMW Act).
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
  • Icequeen99
    Icequeen99 Posts: 3,775 Forumite
    The tax credit regs (unlike the UC ones) don't refer to RTI data, and so what matters is what you actually received from your employer.

    I think if you can evidence at appeal the fact that you won your employment tribunal and that you received no payments into the bank account (presumably you can show payments in to a certain point and then they stop) that is your side of the argument.

    HMRC's evidence of your earnings is the RTI data - it will be up to the judge to then decide whether you did have earnings as defined under the tax credits legislation.

    I would say you have strong evidence with what you have.

    IQ
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
    Mersey wrote: »
    I'm not sure that's quite right - but I agree the lower grade staff may not think they can.


    I recall during the Select Committee evidence session re Sports Direct and so on, this was raised and the senior civil servant said HMRC & the DWP can investigate RTI where concerns are raised that it is fake/inaccurate.


    It may therefore need an MP's intervention to get it resolved.


    But yes, good point re the NMW - this was mentioned yesterday on the News as you might have seen, where another large warehouse-type employer was involved in practices including deducting pay or holding it over to year end, whereas they cannot do this by law (including the NMW Act).

    Yes they can absolutely question RTI returns for tax purposes but if an employer has continued to report the same salary and paid tax/NIC then they are unlikely to be high up on the list for a compliance check compared to employers not submitting returns, not paying tax/NIC, paying less than nmw etc.

    HMRC compliance would be looking at bringing in more revenue, an employer failing to pay a salary wouldn't increase tax/mix/penalties etc for them.

    Where are is nmw hasn't been paid for hours worked then this might be a way in for them. If the company does dissolve however they are unlikely to do anything.

    Regarding the tax credit issue, I think IQs advice is best to follow.
  • sangie595
    sangie595 Posts: 6,092 Forumite
    If there is no chance of getting the tribunal award from the employer, you are entitled to go to the Redundancy Payments Service, who can pay at least some of what you are owed. The Tribunals Office can tell you how to go about this.
  • dippy3103
    dippy3103 Posts: 1,959
    First Anniversary Combo Breaker First Post I've been Money Tipped!
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    Surely HMRC can ask them to proove how they paid you..?
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
    dippy3103 wrote: »
    Surely HMRC can ask them to proove how they paid you..?

    But then they'd have to disclose that the OP claims tax credits which they can't do.
  • dippy3103
    dippy3103 Posts: 1,959
    First Anniversary Combo Breaker First Post I've been Money Tipped!
    Forumite
    But then they'd have to disclose that the OP claims tax credits which they can't do.

    They can with o/p's permission.
  • Darksparkle
    Darksparkle Posts: 5,465 Forumite
    dippy3103 wrote: »
    They can with o/p's permission.

    I take it back, they can.
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