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  • FIRST POST
    • Volcom94
    • By Volcom94 16th Sep 17, 4:38 PM
    • 8Posts
    • 2Thanks
    Volcom94
    I haven't paid tax for around 4 years
    • #1
    • 16th Sep 17, 4:38 PM
    I haven't paid tax for around 4 years 16th Sep 17 at 4:38 PM
    So, I really need some help. Big time.

    I started working at a home Improvements company around august-September time 2013. Although working for the company, I was self employed. The problem is that I never have registered as self employed. Therefore I haven't been paying tax on any money the company paid me (into my bank account, not cash in hand) I've worked for another home Improvements company in that time, doing the exact same thing, then went back to the first one and now I don't work for either. Now four years on, I want to live in Norwich with my girlfriend, and get a regular job where I'm employed and tax is all sorted through them.

    My girlfriend tells me that my new employer will need a p45 from my previous employer (I don't have one because I was self employed) or a p60 ( I don't have one of those because I was never registered AS self employed.

    So I need to pay four years worth of tax, I have no idea how much I owe. On average, I was earning around £250 a week. I know this is all my fault, but I NEED help. So here's what I need answering.

    How much (roughly) do I owe in tax?

    How much can I expect to pay an accountant to get me out this mess?

    What will HMRC do about this? Can I pay my overdue tax in installments?

    How do I get round this with getting employed?

    Some help will be really appreciated. REALLY.

    Thanks
Page 1
    • McKneff
    • By McKneff 16th Sep 17, 4:46 PM
    • 35,521 Posts
    • 45,718 Thanks
    McKneff
    • #2
    • 16th Sep 17, 4:46 PM
    • #2
    • 16th Sep 17, 4:46 PM
    Did you keep any records of income at all.
    Any records of expenditure.

    You probably dont owe as much as you think in tax. With allowances etc. Google accountants in (where you live)

    You realise you are guilty of tax avoidance etc .
    No one can make you feel inferior without your consent
    • Cook_County
    • By Cook_County 16th Sep 17, 4:52 PM
    • 2,893 Posts
    • 2,070 Thanks
    Cook_County
    • #3
    • 16th Sep 17, 4:52 PM
    • #3
    • 16th Sep 17, 4:52 PM
    Sounds like you were employed but your employer failed to operate PAYE.
    • Volcom94
    • By Volcom94 16th Sep 17, 4:59 PM
    • 8 Posts
    • 2 Thanks
    Volcom94
    • #4
    • 16th Sep 17, 4:59 PM
    • #4
    • 16th Sep 17, 4:59 PM
    Not really, I've always thrown away receipts etc. I was sent pay slips but they were ones that the company had made and sent them to me via post and then later on via email. Not the ones that you carefully tear open when you're employed.
    • Volcom94
    • By Volcom94 16th Sep 17, 5:02 PM
    • 8 Posts
    • 2 Thanks
    Volcom94
    • #5
    • 16th Sep 17, 5:02 PM
    • #5
    • 16th Sep 17, 5:02 PM
    I may have some hard copy pay slips lying around, but later opted for them to be emailed to me. Would this be any help?
    • 00ec25
    • By 00ec25 16th Sep 17, 5:04 PM
    • 4,770 Posts
    • 4,148 Thanks
    00ec25
    • #6
    • 16th Sep 17, 5:04 PM
    • #6
    • 16th Sep 17, 5:04 PM
    I started working at a home Improvements company around august-September time 2013. Although working for the company, I was self employed. The problem is that I never have registered as self employed. Therefore I haven't been paying tax on any money the company paid me (into my bank account, not cash in hand) I've worked for another home Improvements company in that time, doing the exact same thing, then went back to the first one and now I don't work for either.

    So I need to pay four years worth of tax, I have no idea how much I owe. On average, I was earning around £250 a week. I know this is all my fault, but I NEED help. So here's what I need answering.

    How much (roughly) do I owe in tax?
    Originally posted by Volcom94
    purely to give you a VERY ROUGH idea of what you may owe...

    £250 per week = £13,000 gross income per year so it is not earth shattering

    you started in sept 2013 so in tax year 13/14, however, as that is not a full tax year let us look at the next year instead, 14/15
    https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2014-15/tax-and-tax-credit-rates-and-thresholds-for-2014-15

    the personal allowance 14/15 was £10,000 but as a self employed person you pay income tax on your PROFIT not on your gross income. However, for simplicity let us take the rather unrealistic position that you have zero costs, and thus all your income was pure profit, so your taxable profit was 3,000 on which you'd pay 20% income tax so £600

    however you would also pay national Insurance. For the self employed in 14/15 that was £2.75 per week class 2 and 9% class 4 on profits over £7,956, so again assuming you had zero costs, that would be £143 class 2 plus £454 class 4

    the above are worst case outcome for what you could owe in tax. Note carefully however that because you did not pay tax on time you will be charged penalties and interest which could be significant sums of money by the time you tot up 4 years worth.

    you need to see an accountant who does personal tax and get help sorting this out as you need someone used to dealing with HMRC when they are being "difficult" over old unpaid tax
    Last edited by 00ec25; 16-09-2017 at 5:10 PM.
    • 00ec25
    • By 00ec25 16th Sep 17, 5:08 PM
    • 4,770 Posts
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    00ec25
    • #7
    • 16th Sep 17, 5:08 PM
    • #7
    • 16th Sep 17, 5:08 PM
    I may have some hard copy pay slips lying around, but later opted for them to be emailed to me. Would this be any help?
    Originally posted by Volcom94
    "pay slips" are something that employees get

    did you ever invoice the company for the work you did or did they just pay you a sum of money and give you a "payslip" as the record. It sounds a complete mess to be honest because it looks very dubious that you were actually self employed to start with. If you were in fact an employee you will still owe tax but the companies will also be involved as they will be in trouble for failing to operate PAYE.

    go see an accountant, you can't sort this out DIY, it has far too many "what ifs" floating around
    • agrinnall
    • By agrinnall 16th Sep 17, 5:17 PM
    • 18,430 Posts
    • 14,144 Thanks
    agrinnall
    • #8
    • 16th Sep 17, 5:17 PM
    • #8
    • 16th Sep 17, 5:17 PM

    You realise you are guilty of tax avoidance etc .
    Originally posted by McKneff
    You can't really be guilty of tax avoidance as it's not illegal. You may have meant evasion, which is.

    You do need to get your tax situation sorted out but it won't stop you getting a job somewhere else as your girlfriend is wrong (probably best not to tell her that), there is no requirement to hand in a P45, simply complete the starter checklist questions at your new employer (you might have to leave Section 8 unanswered as it's not clear whether A or B is the right response).

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/513621/Starter_checklist_v1.0.pdf
    • Volcom94
    • By Volcom94 16th Sep 17, 5:25 PM
    • 8 Posts
    • 2 Thanks
    Volcom94
    • #9
    • 16th Sep 17, 5:25 PM
    • #9
    • 16th Sep 17, 5:25 PM
    To sum up what I was doing, it was canvassing/cold calling. If you made an appointment for a double glazing sales rep to pitch, you got paid a set amount. So at the end of the each week, I'd count up my appointments and be paid x amount. Thanks for the advice, I'll definitely go and see an accountant.
    • Volcom94
    • By Volcom94 16th Sep 17, 5:30 PM
    • 8 Posts
    • 2 Thanks
    Volcom94
    Thank you very much for taking the time to give your advice. I'll definitely go and see an accountant. What a mess. When it comes to paying off what I owe? Do you think I'll be able to do it in instalments?
    • HonourlessWeasel
    • By HonourlessWeasel 16th Sep 17, 5:44 PM
    • 53 Posts
    • 40 Thanks
    HonourlessWeasel
    Thank you very much for taking the time to give your advice. I'll definitely go and see an accountant. What a mess. When it comes to paying off what I owe? Do you think I'll be able to do it in instalments?
    Originally posted by Volcom94
    On your payslips does it show any income tax being paid at all? I'm guessing not, as you said you were technically self-employed.

    Secondly - have you had any correspondence from HMRC?

    Finally - have you logged in to your personal tax account online to see your tax status? You can do that now to see how much HMRC know about you, you may even be able to see what's missing from your contributions over the past four years.

    So, I've been in a crappy situation with HMRC this year, and when they want their money, they want their money. I've not been in a position to pay AT ALL. They knew this, they absolutely knew this, provided them with undeniable proof of this inability to pay what was owed and all they did was sent the debt collectors in despite the entire situation being part of a massive dispute which they failed to make any effort to resolve and refused to provide any answers to my repeated questions by telephone and letter. Dealing with HMRC is like trying to get blood out of a stone - it's been horrific trying to work with them.

    It's best to nip it in the bud as early as you can, be upfront with them, but go to them with all of the facts that you possibly can because they will probably put up a brick wall and refuse to help you at every step. Unfortunately, that's been my experience of trying to work with them. One of the things they're refused to do is accept payment in instalments because my issue goes back five years (they didn't bother to tell me about it until this year), however, if you catch them early enough, they might be able to claw it back via your tax code, but that could take years depending upon the amount.
    • Volcom94
    • By Volcom94 16th Sep 17, 5:59 PM
    • 8 Posts
    • 2 Thanks
    Volcom94
    Nothing on payslips about income tax being paid, I set up a government gateway account yesterday, can't see anything about tax, it just mentions that there's 6 years where I haven't paid enough national insurance. That's a shame about your situation, last thing I need is debt collectors at my door. I know I've been stupid but all I want to do is pay off what I owe and never go self employed again! Thanks for the help.
    • HonourlessWeasel
    • By HonourlessWeasel 16th Sep 17, 6:13 PM
    • 53 Posts
    • 40 Thanks
    HonourlessWeasel
    Nothing on payslips about income tax being paid, I set up a government gateway account yesterday, can't see anything about tax, it just mentions that there's 6 years where I haven't paid enough national insurance. That's a shame about your situation, last thing I need is debt collectors at my door. I know I've been stupid but all I want to do is pay off what I owe and never go self employed again! Thanks for the help.
    Originally posted by Volcom94
    If you're young enough, or at some point in the not too distant future, you might be able to make up the shortfall in your NI contributions in one lump sum payment. I'd say it's worth doing, because if you don't then it has a serious impact on your state pension. There will come a point when they don't allow you to make up the shortfall, so you're stuck living on whatever level of contributions you to get by about the age of 50 or 55 and that could be the bare minimum.

    That's a question worth asking when you get in touch with HMRC. The NI contributions are something you would have been paying if you'd set up your own limited company or registered yourself as a sole trader/self employed. They're a whole other world of pain that I've been through with HMRC, but certainly worth getting right and getting proper advice about.
    • decbel
    • By decbel 16th Sep 17, 6:25 PM
    • 1,395 Posts
    • 1,490 Thanks
    decbel
    With NI contributions if there's a shortfall for a few years they normally send you a letter giving you an option to square up.

    I had one once.
    • McKneff
    • By McKneff 16th Sep 17, 6:39 PM
    • 35,521 Posts
    • 45,718 Thanks
    McKneff
    Nothing on payslips about income tax being paid, I set up a government gateway account yesterday, can't see anything about tax, it just mentions that there's 6 years where I haven't paid enough national insurance. That's a shame about your situation, last thing I need is debt collectors at my door. I know I've been stupid but all I want to do is pay off what I owe and never go self employed again! Thanks for the help.
    Originally posted by Volcom94
    Nothing wrong with going self employed as long as you register and keep records.
    And take a course on book keeping lol
    No one can make you feel inferior without your consent
    • Volcom94
    • By Volcom94 16th Sep 17, 8:03 PM
    • 8 Posts
    • 2 Thanks
    Volcom94
    Thanks, it's just I was only "self employed" or on commission because that's what they do at that company. Now that I want to permanently live in Norwich, I just want to get my taxes in order and let my future employer do that work!
    • xylophone
    • By xylophone 17th Sep 17, 12:09 AM
    • 22,881 Posts
    • 13,239 Thanks
    xylophone
    I am not sure that you were "self employed" - it seems to me that you were an employee of the companies in question and that they should have operated PAYE/NI as appropriate.

    https://www.gov.uk/employment-status/worker

    Have you obtained a state pension statement?

    https://www.gov.uk/check-state-pension
    • Volcom94
    • By Volcom94 17th Sep 17, 10:14 AM
    • 8 Posts
    • 2 Thanks
    Volcom94
    Certainly no PAYE operated, just a case of give us your bank details and we'll pay you. As I say, I've never paid a penny in tax since I started working at these companies, nor have I set myself up as self employed. So as far as the government are concerned, I haven't been working for the last 4 or so years. So now this has really come back to bite me on the a***
    • 00ec25
    • By 00ec25 17th Sep 17, 11:59 AM
    • 4,770 Posts
    • 4,148 Thanks
    00ec25
    Certainly no PAYE operated, just a case of give us your bank details and we'll pay you. As I say, I've never paid a penny in tax since I started working at these companies, nor have I set myself up as self employed. So as far as the government are concerned, I haven't been working for the last 4 or so years. So now this has really come back to bite me on the a***
    Originally posted by Volcom94
    Ok, so it appears you worked on a commission only basis and were not paid anything if you did not sell something.

    commission only is actually a pretty strong indicator of self employment status rather than employee status. It would of course help a great deal more if you can produce a contract setting out the terms of the agreement between yourself and the 2 companies. and technically you should have invoiced the company for your commission, but this is a minor issue now.
    http://www.millerrosenfalck.com/2009/05/employee-or-self-employed-hmrc’s-approach-to-employment-status/

    sticking with the assumption you were self employed, you will need:
    - evidence of all income received over the 4 year period. Not just what they paid you but also all other income you got (interest on savings, dividends received, taxable benefits claimed eg JSA)?
    - evidence of any costs you paid out which were wholly and necessarily related to the work you did. For example: itemised calls on your phone bill? mileage undertaken when visiting prospective customers? stationery you purchased? extra lighting and heating because you were working from home during the day?

    you will then need to work out your profits for each tax year and obviously submit the tax return. You will then need to deal with HMRC when they impose penalties and interest for late submission.

    if your income was really "only" around £13k it may be rather expensive for you to use an accountant, but in the circumstances I think it would be the most sensible option as there is a lot of info that needs to be presented correctly in case HMRC examine you in detail. sadly that won't come cheap and may cost you > £1,000 for an accountant so dig out and summarise any and every bit of info you can find so the accountant is not having to spend time (at your cost) on doing that them self. Pick wisely, can you get anyone to give local recommendations on accountants round your way?
    Last edited by 00ec25; 17-09-2017 at 12:02 PM.
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