Bogus Employment

Morlock

What can be done about an employer who has duped a person into believing that they are in legitimate, full-time employment, only to later find (after being made redundant) that the employer had not been paying NI contributions and had deducted tax from earnings which the IR has not received?

PlutoinCapricorn

Did the 'employee' get payslips, P60s and a P45? Did the amounts they received appear to be net of income tax? If so, it is not their problem as it is not their responsibility to ensure that the tax deducted reaches HMRC and they had reason to believe that all was well.

There is the question of the employee's NI Class 1 payments record.
It might be worth contacting HMRC and letting them know about these concerns.

LindsayO

directGov has a page on tax fraud

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/ContactOrDealWithHMRC/DG_10010579

Evilm

I believe that you should just be able to report it to HMRC and ask them to sort out your records. You thought your taxes were getting paid, I would say not your fault!

SarEl

You should indeed report it to HMRC - but before rushing off to do so I would make sure that you can evidence you have been duped. I have come across similar cases, but there the employer provided wage slips etc - just never paid HMRC. What if the employer says that you were self-employed? Then it's you who owes the bill and could be landed in it. I think I would suggest you get some advice before you do anything.

Uncertain

SarEl wrote: »

You should indeed report it to HMRC - but before rushing off to do so I would make sure that you can evidence you have been duped. I have come across similar cases, but there the employer provided wage slips etc - just never paid HMRC. What if the employer says that you were self-employed? Then it's you who owes the bill and could be landed in it. I think I would suggest you get some advice before you do anything.

In most cases of sham "self employment" where the person is really an employee, HMRC usually go after the employer rather than the individual.

SarEl

Uncertain wrote: »

In most cases of sham "self employment" where the person is really an employee, HMRC usually go after the employer rather than the individual.

I agree. But there isn't enough information here to conclude that this is clearly "sham self-employment". If the person has wage slips showing deductions that haven't been made, or other contractual documentation, then great. But if they haven't I would suggest a talk with CAB or a solicitor (perhaps through a free first session?) to make sure that they present this correctly. Just being cautious. I wouldn't necessarily expect that an employer who has deliberately misled someone in this way leaves a paper trail to show it.