Tax worries, 2 jobs, 1 not payroll but never knew.

Ilaaf

Hi everyone,

Hope someone can help.

I work 2 jobs; my second job which I have on a BR tax band is for a large national company. I receive a payslip each month and pay tax on every pound; this is my 2nd job in tax terms. Started employment in august 2008. Everything fine here.

My problem is my first job I started in august 2007. Handed in my P45 and all was going fine. At this time it was my only job from august 2007 until starting my 2nd job in august 2008. The company was going through financial difficulties so the pay became as when they could. This continued until the company was liquidated in May 2009.

My employment at this stage was transferred to a new company owned by the same owners. I have just discovered that since the new company started in may 2009 the money I received has not been going through payroll and I have been paid as a contractor. I wasn’t aware of this and only found out when I over heard a conversation between the owner and the accountant. Nothing malicious just stupidity on the owners behalf, he didn’t realise I needed to do tax returns as he thought as it was below the tax threshold I was fine.

I haven’t done any tax returns as I wasn’t aware.

I am now really worried. I just need some advice before I contact the tax office so I know what I am getting myself into. I've heard horror stories and I just want to make sure I am prepared for the worst.

How do I get a P45 from a liquidated company?

How do I sort out the tax for the monies paid as a contractor since May 2009?

Am I liable for any fines?

Will the tax office understand the situation or am I in serious trouble?

I just want to sort everything out and keep everything above board. I know the money is less than the tax threshold so I won’t have anything huge to pay but I'm worried about huge fines.


What should I do?

Any help or advice is greatly appreciated.

KiKi

I've usually found HMRC incredibly helpful with this sort of thing, as long as you declare it and work with them to sort it out. It is *possible* that they'll ask you to pay a small fine for missing 2009-2010 deadline, but I think it's highly unlikely. Once you proactively call them (ie, rather than them catching up with you!) and work with them, and do what they ask they are very good.

I didn't realise that I had to declare all interest on savings once I hit the 40% bracket, and for 6 years only paid 20% tax on interest. I called them and they simply asked for six years P60s, and bank statements of interest earned. It took AGES to get to the right person, but once the right person had it she sorted in a few weeks. No fines (and I owed a bit!), nothing untowards, simply sorting it out.

(This is based on my own experience with HMRC, not any legal knowledge of how they operate!)

I hope that reassures you a bit.

KiKi

Savvy_Sue

Interesting one: if you're still working under the same terms and conditions, you might find that HMRC disagree that you're a contractor, and whack a fine on the company for not paying your tax and NI.

but I agree that HMRC are usually helpful if you go to them rather than they think you've been deliberately evading and wait for them to find you ...