Who can write payslips?

IPIP

Hi

I am self employed and a director of a limited company. When I get enough work, I sometimes employ a freelancer to assist me and pay them in cash.

I have a dedicated freelancer who has been with me since the beginning. I don't want to take him onboard as a employee due to financial reasons.

He recently asked me if I could write him a payslip for the previous 3 payment.

Although he is a freelancer, can I still write him a payslip?

Thanks

Horace

If the freelancer has been with you since the start then the HMRC will class him as an employee and as such you should be paying his tax and National Insurance.

When the freelancer works for you does he submit an invoice to you for work carried out? Paying in cash is a dangerous route to go down because you need to account for it in your books.

InsideInsurance

IPIP wrote: »

Although he is a freelancer, can I still write him a payslip?

If he is not an employee then he should be sending you invoices and you pay them rather than you giving him a payslip.

Why is he wanting them? If he is wanting to prove income then his accounts should prove it or you could give him a purchase order if he is looking for proof of future orders.

IPIP

Horace wrote: »

If the freelancer has been with you since the start then the HMRC will class him as an employee and as such you should be paying his tax and National Insurance.

When the freelancer works for you does he submit an invoice to you for work carried out? Paying in cash is a dangerous route to go down because you need to account for it in your books.

Hello Horace

I usually do not get enough work to operate as a full time. I do other self employed work beside my company. But when I do get a work, under my limited company, me and him usually work on it and once the job is complete, he submits an invoice, then I pay him.

lemontart

as others say he should be invoicing you and you pay the invoices unless of course you have been paying tax and employers ni then he should have payslips reflecting that.

chalkie99

Sounds like he needs credit and doesn't have the necessary accounts so is making out he is permanently employed and thus needs to produce 3 payslips as proof.

Regardless of any friendship you may have steer well clear of doing this before it lands you in trouble.

Horace

IPIP wrote: »

Hello Horace

I usually do not get enough work to operate as a full time. I do other self employed work beside my company. But when I do get a work, under my limited company, me and him usually work on it and once the job is complete, he submits an invoice, then I pay him.

He doesnt need a payslip then as he has already invoiced you for the work, instead of paying in cash why not pay him direct into his bank or by cheque?

antrobus

Take one sheet of paper, grasp pen in hand, and write the following;

Paid to Mr A.N. Other on the xx Month 20XX the sum of £whatever in respect of Invoice no 123456

Signed

Mr IPIP
Managing Director
IPIP Ltd

That was easy wasn't it?

Or take a sheet of paper and write something like, To whom it may concern. I can confirm that I have paid the following amounts to Mr AN Other in respect of work carried out for IPIP Ltd...

And I suppose that using headed notepaper, the kind that has the company's registered office and number on it etc, would make it look more official.

Now I perfectly understand some of the comments made so far. Mentioning 'payslips' does conjur up the spectre of PAYE and NIC, and three of them does sound like something you'd need to support a loan application of some kind. But I wouldn't assume that the freelancer in question is necessarily attempting to commit a fraud and trying to drag the OP into it. After all if they have been paid in cash, how else are they going to prove to a third party that they did earn what they claim to have earned?

So I'd say, ask your freelancer friend what he really wants. There's no harm in producing some kind of documentary confirmation of what you've actually paid him, but do not in any circumstances be persuaded to produce some mickey mouse payslips that purport to show an employment that does not exist.

Mistral001

Payslips are used to show your employee the breakdown of his/her pay for their information. It should show basic pay plus overtime and bonuses and deductions of PAYE, NI, pension contributions etc. Is it proof of employment? I am not so sure that it is. It is really only for information as far as I can see.

If this person is an employee all but in name then HMRC will require you to treat him as an employee and make all the NIC, PAYE, etc deductions from his wages and register with them as an employer. See the following:

http://www.hmrc.gov.uk/paye/employees/start-leave/status.htm#2