Implications of not earning enough to pay NI

Prudent

My daughter works as a live in carer in London. It is her frst full time job and she is really enjoying it. Her wage is very low (£120 paid by cheque weekly) but she has a room, bathroom and all her food provided plus good opportunties for travel and leisure activties as part of her job.

She was asked to agree to stay for a year minimum and is very happy so willing to do. She also loves being in London and if she had to rent there would probably have less cash on hand anyway.

However we are both a bit concerned that she is not paying NI. She intends to work for a couple of years and then go to uni. I know one of the implications of not paying NI will be that she is not making payments towards the state pension. Please can anyone tell us what the other implications are?

chrisbur

First the easy bit the lower earnings limit for NI for 2012/13 is £107. Provided that you earn this or more you are treated as having paid NI even if you have not earned anough to actually pay it.

Second the board and lodging sound like benefit in kind which would affect tax, but I know little of this so hopefully someone with more knowledge will be along later.

Thirdly hopefully the employer has registered with HMRC and is not doing this on the quiet, as then the earnings above the lower earnings limit are not going to be recorded.

Prudent

I think our concern is that it is being done on the quiet, although we don't know for sure. How do we find out?

agrinnall

I'm not sure if it's possible to ring HMRC to find out if they are recording NI credits against her NI number, but she could try 0845 302 1479 in the first instance. She definitely can't get a statement of contributions at this stage, as that's not available for current year contributions.

She is entitled to get a payslip (see http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_10027228) which would help to prove that she was employed should there be any question about benefits later.

maninthestreet

Does your daughter receive a payslip?

Prudent

Thank you for all the help

I have asked my daughter to speak to her employer about a payslip and registering her employment.

I have also asked to go to the bank and request paper statements and then to file the statements as they come in. This should give her a record of the regular weekly payment.

Prudent

maninthestreet wrote: »

Does your daughter receive a payslip?

No, but I am hoping she can get one. I know my daughter's wages are paid from a payment her employer receives for her son's care. I think this is a payment from the local authority. My daughter's actual cash payment only works out at about £3 per hour, but then she has the benefit of living rent and bill free with all her food included, which in London must be worth a fair bit.

Evilm

Sounds like she's considered "self employed" by her employer. However I think this falls into the same catagory as a nanny type job and since she is only working for one employer she shouldn't be self employed and should be on PAYE.