Employer not paying my tax

Noospheric

Hi,

I have been working for a small company for 1 year and 4 months now. From the get go things weren't done as they should have been.

My wages were constantly late and paid by cheque and I never had a pay slip to state the amount of tax I was being deducted.

Having asked several times about my tax I was given various answers, such as "ask someone else", "the tax office are dealing with it" etc. I'm certain that my taxes are not being paid and I would like to know for sure.

I plan to ask today for a P60 for the last year with an exact date as to when I will recieve it but should the given date pass, what are my options after that?

Thanks.

Mudd14

Your options are to report them to HMRC.

They should have given you a P60 by the end of may as long as you were employed at 5 April 2009 and you are legally entitled to a payslip with every payment.

It may be worth raising a written grievance asking for your payslips and P60. Might be worth saying if they do not provide them then you shall report them to HMRC. Depends really how much you want to rock the boat!

payless

A bit of self preservation might be required here

If you have had tax deducted but not paid across to HMRC, then that's really your employer's problem, not yours.

In meantime if this is making you uncomfortable ( and it should) look for a another job , as it might be teh start of things to come.

Yes you could call HMRC .. if they are in teh wrong , then that might speed up the process... which of course is correct, but gives you less time to sort another job.

Noospheric

Thanks for the reply.

Just to add to this; before this job I was unemployed for six months. I never recieved a p45 from the job centre and I have never been given a p46 by my employer, despite asking. I assume my tax code hasn't even been worked out...?

I don't think tax is even being deducted from my wages. The first month they were and every month after that I recieved more than the first month.

I never wanted to rock the boat as this job was important to me - I didn't want to spend six more months unemployed! Recently I've had to though and I think the motion will have to continue until this is resolved.

I spoke to citizen's advice a few months back regarding my late pay (it reached 3 months late at one point and isn't much less than that now) so I have been made aware of raising a grievance.

What happens if the issue isn't resolved after I give them a grievance letter though?

I have read I need detailed information regarding my discussions and meetings with them regarding my concerns, but it is so difficult getting anything from them on paper.

fengirl_2

The payslips issue can be resolved by taking your employer to an ET. The P60 issue is correctly raised with HMRC.
At the end of the day, this is a rubbish employer and you are either stuck with it or leave.

schneckster

Your employer sounds like he hasn't got a clue on how to deal with employees, a common problem with small companies.

Personally, I'd get your cv out, first and foremost. Find something else. When asked why you want to leave, simple answer is payment problems with your salary. No prospective employer would find anything wrong with that answer.

Secondly, ask the HMRC for a statement on the tax you have paid since you started working there and tell them why you want it. Hopefully, they'll be able to tell you what has been paid in your name. If they say nothing, then at least you can work that out with HMRC yourself without relying on your boss.

Lets just clear something up, though... even though you're on PAYE, the taxman will come after you for unpaid taxes, not your employer. If your employer gets the tax wrong, HMRC comes after you for the shortfall... or pays you back the excess. All you can do is make sure your boss is paying the right amount of tax.

I would rather lose a job with a bozo like your boss than have HMRC upset with me. Your boss can put you on the dole. The HMRC can put you behind bars!!!

As for late or outstanding payment of salary, write a letter to the MD outlining exactly what the problem is with a statement of account, i.e., what they owe and from when. Also outline the lack of payslips and P60 and your suspicion that PAYE has not been paid in your name. I would also say that you have had no choice but to clear the matter with HMRC.

I think your job has gone, anyway. But at least you'd leave without a criminal record for tax evasion if you contact HMRC as soon as possible.

Sounds like a nasty position to I wish you the best of luck.

Schneckster

fengirl_2

Sorry, I have to disagree with the previous post. If an employer has not been deducting tax and NIC from an employee when he should have been, then the debt is fairly and squarely with the employer.
Even where an employer has treated someone as self employed and it has later been ruled that they were an employee, the employer has been made to pay the tax and NIC due under PAYE, even though the 'employee' was registered as self employed and paid his own tax.
This is a poor employer, sadly there are many about.

schneckster

Sorry Fengirl, but I disagree with you on your disagreement... err... you know what I mean

Basic definition... PAYE = Pay As YOU Earn. The operative word, there, is "you". It's your bill, not your employer's. They are meant to collect it from your salary and pass it to HMRC on your behalf. But if they don't, despite being in trouble for it, it's still your bill and the taxman will still come after you as you'd effectively be earning money and not paying tax.

And there are plenty of examples where they do. This is why I have been doing self assessment for many years. If my employers get it wrong with the PAYE, I can see it and correct it long before the taxman eventually notices and gives me a whacking great bill. Usually, they have got it wrong and I've paid too much tax and therefore get a rebate . But I know plenty of people who have been liable for hundreds, if not thousands, because their employer got the PAYE wrong and they haven't known about it for years until the taxman somehow sees it and knocks on the door.

Income Tax and NI are taxes that YOU owe the state. Your employer doesn't owe it. They just collect it and pass it on, and get into trouble if they don't. But if they don't pass it on, YOU still owe it, regardless!

Your point about self employment is a more complicated one. But again, the employee can still get in the neck. If you operate as self employed, you can claim your costs against tax and, therefore, pay less tax. If you're employed, you can't claim for costs and therefore would owe more tax. The self employed in your example would get hit for the difference outstanding. The courier industry is rife with companies and drivers both getting hit for this... the driver usually gets a bill for the difference in tax. The companies get fines on top!

The OP really should talk to HMRC as soon as possible and make arrangements for any tax not paid. If she rings them, they'll be happy to make an arrangement. If they chase her, they'll want paying in full there and then.

Schneckster

fengirl_2

Getting PAYE worng as a technical operation is different from failing to operate PAYE at all, or even failing to pay it over to HMRC.
As an ex Inspector of Taxes with 26 yrs service, I must reiterate that its the employer's duty to make sure that everyone who should be on PAYE is on PAYE. It is also their responsibility to pay the deductions over - in neither case can the employee be responsible.
Prime case a couple of years ago _ a handyman was employed by a hotel. When he came to retire, he told the directors that he really wanted to carry on working, so they agreed with him that he would continue on a self employed basis. He came in once a week and was given a list of jobs to do and got on and did them. The hotel was subject to an inspection and the handyman was ruled to be an employee and the hotel required to pay the tax and NIC they should have deducted. They appealed, partly on the grounds that the handyman had also self assessed and paid his own tax and NIC. The court ruled that this was irrelevent and that it was still the hotel's responsibility to pay the tax and NIC due under PAYE.

pelirocco

schneckster wrote: »

Sorry Fengirl, but I disagree with you on your disagreement... err... you know what I mean

Basic definition... PAYE = Pay As YOU Earn. The operative word, there, is "you". It's your bill, not your employer's. They are meant to collect it from your salary and pass it to HMRC on your behalf. But if they don't, despite being in trouble for it, it's still your bill and the taxman will still come after you as you'd effectively be earning money and not paying tax.

And there are plenty of examples where they do. This is why I have been doing self assessment for many years. If my employers get it wrong with the PAYE, I can see it and correct it long before the taxman eventually notices and gives me a whacking great bill. Usually, they have got it wrong and I've paid too much tax and therefore get a rebate . But I know plenty of people who have been liable for hundreds, if not thousands, because their employer got the PAYE wrong and they haven't known about it for years until the taxman somehow sees it and knocks on the door.

Income Tax and NI are taxes that YOU owe the state. Your employer doesn't owe it. They just collect it and pass it on, and get into trouble if they don't. But if they don't pass it on, YOU still owe it, regardless!

Your point about self employment is a more complicated one. But again, the employee can still get in the neck. If you operate as self employed, you can claim your costs against tax and, therefore, pay less tax. If you're employed, you can't claim for costs and therefore would owe more tax. The self employed in your example would get hit for the difference outstanding. The courier industry is rife with companies and drivers both getting hit for this... the driver usually gets a bill for the difference in tax. The companies get fines on top!

The OP really should talk to HMRC as soon as possible and make arrangements for any tax not paid. If she rings them, they'll be happy to make an arrangement. If they chase her, they'll want paying in full there and then.

Schneckster

No you are wrong , the employer is ALWAYs responsible for paying the Tax and NI over to HMRC ,.

HMRC will not be able to confirm whether the employer has made any payments for this employee in this tax year , they can only do this when ( or even if ) the employee has submitted their end of year returns .
Please dont post unless you are sure of your facts

pelirocco

fengirl wrote: »

Getting PAYE worng as a technical operation is different from failing to operate PAYE at all, or even failing to pay it over to HMRC.
As an ex Inspector of Taxes with 26 yrs service, I must reiterate that its the employer's duty to make sure that everyone who should be on PAYE is on PAYE. It is also their responsibility to pay the deductions over - in neither case can the employee be responsible.
Prime case a couple of years ago _ a handyman was employed by a hotel. When he came to retire, he told the directors that he really wanted to carry on working, so they agreed with him that he would continue on a self employed basis. He came in once a week and was given a list of jobs to do and got on and did them. The hotel was subject to an inspection and the handyman was ruled to be an employee and the hotel required to pay the tax and NIC they should have deducted. They appealed, partly on the grounds that the handyman had also self assessed and paid his own tax and NIC. The court ruled that this was irrelevent and that it was still the hotel's responsibility to pay the tax and NIC due under PAYE.

I have known this happen to a few people , they employ people on an self employed basis only to find out that HMRC dont consider them to be self employed , and the employer has had to pay the Tax and NI , even tho they have paid the '' gross'' amount to the employee