Being paid in cash and don't think employer is paying tax or NI

i_wanna_save_money!

Well, the title says it all really. For around the last six to nine months my OH has not been getting his weekly wage on a Friday as he used to, the boss has been paying £100 here and £50 there - owes my OH around £500/600 pounds plus this weeks wage.

We are struggling financially, but that's another story...

The thing is last week, a collegue of my OH said that he has looked into things and it seems everytime the boss has been paying in cash, he has not been paying tax and NI (although the wage they have received is the amount they would get if it was deducted if you see what I mean). Boss has been paying in cash as he has been paying wages when customers settle their bill, mainly in cash, it is that sort of trade.

My question is who is liable to pay the tax and NI? Obviously up until this point OH assumed boss had been paying it, but what I can see from google, my OH will have to pay and it seems to be illegal to be paid in cash (?) or am I misinterpreting things.

Please can someone advise on what we can do and who is liable to pay tax and NI. Totally fed up of this situation

antrobus

i_wanna_save_money! wrote: »

My question is who is liable to pay the tax and NI?

The employer aka the boss.

i_wanna_save_money! wrote: »

... it seems to be illegal to be paid in cash

Not unless Gordon Brown slipped that one through when no one was looking. Still perfectly legal to use cash as far as I'm aware.

tanith

My husband got a letter from HMRC telling him he was 2yrs short on contributions for specific years , we managed to trace the years to a time he was working as a minibus driver , turned out they had never paid any NI contributions although it seemed the tax was paid.. they tried to trace the company but it had long ago gone bust so he is still short those 2yrs I think he could buy them back. You could approach HMRC and ask them whats going on with his contributions..

Errata

Does he get a payslip every week?

AdamB

antrobus wrote: »

The employer aka the boss.

Only if OP's OH can prove to HMRC that the employer has been deducting tax and NI (usually through payslips and P60s). If it can't be proved, then the employee is liable.

skintandscared_2

If your OH is working on a self-employed contract basis, and the boss actually is paying tax and NI contributions, he should be providing your OH with the corresponding voucher with his wages. Those vouchers are what you use to put together your tax return at the end of the year. Your OH should ask for the vouchers to show the tax paid. If the tax isn't being paid then the wages your OH are receiving are gross, and he'll have to pay tax on what he's received. So the boss wants to either (a) provide the vouchers or (b) increase the wages to the pre-tax level so your OH can pay the tax himself!

antrobus

AdamB wrote: »

Only if OP's OH can prove to HMRC that the employer has been deducting tax and NI (usually through payslips and P60s). If it can't be proved, then the employee is liable.

Demibourne Ltd v HM Revenue & Customs (2006) held that where "an employment relationship exists, the employer is responsible for deducting tax from payments made to the employee in accordance with the PAYE Regulations" and that HMRC "do not have the discretion to choose whether to collect tax from the employer or the employee".

The PAYE regulations were amended in 2008 to allow HMRC to collect tax from employee in certain circumstamces, specifically where the employee was claiming to be self-employed. Since this does not appear to the case as far as OP is concerned the ' Demibourne rule' applies.

smileylondongal

I do think he can still pay in cash but that sometimes can mean that the employer is doing something dodge! certainly if it's not regular and he owes your OH for the hours. Does your OH have a contract and does he have payslips? I doubt from what you say above this is the case but if so, then you can prove you have worked for that employer, so I'd get OH to ask for his money, find another more legit job and report this chap to the HMRC.

His not potentially pay tax and NI to the HMRC on behalf of your OH means your OH will suffer in the long term as he will owe tax and not have sufficient NI contributions (ie not enough to make sufficient years to make the full state pension). My mother was caught out on this and she suffered as she couldn't prove she's work for the sonofa!!!!!!

I'd get the money and find work elsewhere, but that's only my own opinion.

AdamB

antrobus wrote: »

Demibourne Ltd v HM Revenue & Customs (2006) held that where "an employment relationship exists, the employer is responsible for deducting tax from payments made to the employee in accordance with the PAYE Regulations" and that HMRC "do not have the discretion to choose whether to collect tax from the employer or the employee".

The PAYE regulations were amended in 2008 to allow HMRC to collect tax from employee in certain circumstamces, specifically where the employee was claiming to be self-employed. Since this does not appear to the case as far as OP is concerned the ' Demibourne rule' applies.

Thanks for that. I missed that one.

(wanders off thinking his employment law knowledge is way out of date )

Alter_ego

AFAIK paying in cash is OK so long as correct payslip is provided.

AirlieBird

http://www.hmrc.gov.uk/working/intro/casual.htm

What about cash in hand?

It's illegal for your employer to pay you cash in hand without deducting tax and National Insurance contributions from your wages.
If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:

• maternity or paternity leave
• sick pay
• Jobseeker's Allowance

In addition you could end up having to pay the tax and National Insurance contributions yourself.
If you suspect your employer of not paying tax or National Insurance contributions on your wages you can report them in confidence using the Tax Evasion Hotline on Tel 0800 788 887.