casual worked not registered as self employed HELP

tiptoes27

Sorry this is a long one -I am trying to help my newphew who has got himself into a mess with work. He is 18 and was registered as self employed for five months from Sep 08 to Jan 09 then the work dried up and he has to 'unregister' as self emplyed in order to claim income based job seekrs allowence. He claimed JSA from Jan to March this year and then got offered a part time casual job on a trial basis so he stopped claiming job seekers allowence but did NOT reregister as self employed. The guy he is working for has been stringing him along a bit promising him more work and saying he will get him a van etc but in reality it appears he has just been using him to to the donkey work. He was giving him £40.00 a day cash in hand and said he would put him on a permenant contract soon but it has not happened. He has not worked every day, sometimes two days a week and sometimes not at all for weeks at a time - financially he would have been much better off claiming JSA while how was looking for something else. Now the guy has stopped using him and owes him £300.00. He really did not want to be unemployed.He has been looking for other work and now has an appointment for an 'application session' for a new supermarket via the job centre which he found out through someone else. These appointments are usually only offered to people who are claiming JSA as I understand it. The problem he has is how can he put the last 9 months work on his application form as he is not registered as self employed and if he does not put it on the form it will look like he has been doing nothing for the last 9 months. He also now wants to register as umemployed but does not know what to say about what he has been doing. I said he should contact Inland Revenue and tell them he has been self employed since March but he said you only have three months to tell then and he would get in trouble. He is willing to pay any NI he owes, and has only earned about £2000 in all the time he was working for this guy so I would imagine he would have not tax to pay. Not sure what to advise him to do next Please help

jamesdrew

Best thing is to tell the truth and advise that due to an oversight on his part he did not re-register as self employed. Proivided you tell the truth they will be sympathetic and advise the best course of action.

tiptoes27

So he should phone Selp Employment department and explain to them? Do you think they would be sympathetic? He is worried that he will be prosecuted for not informing them earlier. I do feel sorry for him because he is a really hard woker and did not want to register for Job Seekers allowence but feel some of these employers out there are taking advantage of these young lads and should not really be paying them cash in hand - if they object they do not get the work and they do need the experience. His employer kept fobbing him off when he raised concerns about not been registered as self employed and kept telling him 'don't worry I will put you on the books next week, month, when I get the next big job in.

paulwf

You can take two routes.

1) As the employer owes £300 in outstanding wages and promised to register the worker as employed report them to HMRC. It is up to HMRC to decide if someone should be employed or self employed...an employer can't switch a worker between the two depending on what they feel like doing. If you explain the wages muddle at the same time you may get somewhere with this approach or you may not.

2) Explain to HMRC about being paid without registering and your nephew will probably get a small fine but get his CV back in some sort of order. Of course, being self employed your nephew should have invoiced the company or got some sort of receipt upon payment. I doubt this happened so you'll have a bit of a mess to sort out with HMRC as to how much he owes.

As he is 18 and got nowhere in the last year (I'm not saying it is his fault as there is a recession on) might it be worth his while taking the long view and going back to college to learn some skills that will help him in the future? Make the most of the grants and subsidies he can get at that age, its got to be better than staying on JSA at 18.

tiptoes27

Thanks very much for taking the time and trouble to reply.

fengirl_2

I dont think your nephew is self employed and its therefore the employer's responsibility to deduct tax and NIC. I would take the stand as outlined in (1) above and let the employer carry the can. I bet he doesnt carry employers liability insurance and has no intention of putting things on a level footing.

tiptoes27

My newphew is no longer working for this guy and would be really worried about getting him into trouble as he has turned out to be a nasty piece of work and would know who it was who reported him into trouble with tax office. My newphew would like to make sure that he can put this job on his CV when applying for jobs and also can say he worked there if he has to apply for JSA - even if it means paying backdated Ni and a fine (any idea what the fine would be?) he is not really self employed in the true sense of the word he is just trying to make sure he is legal. Next time he will wait till he can get a job with PAYE - alot less trouble all round.