Will I get my employer into trouble?

pinkteapot

Am I right in thinking I could get in trouble with HMRC in the future if I don't tell them about it? (as I've noticed it was paid gross and is missing from my P60)

Or is this the company's problem?

When I negotiated the extra pay I assumed it would be paid through payroll as normal as this has never happened before. Almost wishing I hadn't bothered now!

cte1111

pinkteapot wrote: »

Am I right in thinking I could get in trouble with HMRC in the future if I don't tell them about it? (as I've noticed it was paid gross and is missing from my P60)

Or is this the company's problem?

When I negotiated the extra pay I assumed it would be paid through payroll as normal as this has never happened before. Almost wishing I hadn't bothered now!

I think unfortunately it is both your problem and the company's problem. I'm presuming that all your work takes place in the UK and you are a UK resident. If so, you need to pay tax and national insurance on this sum. I can't see how you can resolve this without bringing it to the attention of the UK accountant TBH.

First step is to ask for a payslip as you've mentioned. If this isn't forthcoming, then I would approach the UK accountant in confidence to let them deal with it.

HMRC can and do find out all sorts of things you might not realise. I'm in the process of helping a friend sort out her tax problems caused by not declaring one of her building society's interest payments. HMRC have picked up on this and are now investigating her.

chrismac1

A foreign company has paid you money. If you are a UK tax resident you have a responsibility to declare all worldwide income including this money. You can either call HMRC or complete a self-assessment tax return, which everyone is entitled to do if they so choose. End of story.

If you completed the SA return it is highly unlikely in my view that HMRC would ever come back to your UK employer. HMRC can't get the easy peasy stuff right most of the time, to follow up on this one they must make some connection between your UK PAYE employer and this other overseas company which has paid you some money. That is a long shot.

So submitting an SA return does two things:

1. Fulfills your legal obligations.
2. Makes it unlikely anyone ever hears from HMRC about this for any reason.

Doubtless the HMRC stooges on this site might disagree with this suggestion. However, can anyone come up with a better option? If you were to call HMRC, you'd spend 15 minutes getting through to someone who hasn't got a clue about straightforward aspects of the UK tax system, never mind aspects involving foreign income.

If you were to write to them, you could be setting yourself up to a mind-numbing paper chase in which HMRC lose your letters, ask for ridiculous amounts of extra information, potentially completly mess up your tax and all the rest of the UK tax system 2012 style. You do not have to look far on this site to see evidence of this from numerous other posters!

pinkteapot

Thanks both. I'll try asking for a pay-slip (simple question, worst they can do is say no).

I am indeed a UK resident (UK citizen) and work solely at the UK office (have never even travelled to the foreign one). Just a completely normal UK worker till we were taken over last year!

Re tax return - I used to do them as I used to be self-employed. Haven't done them the last few years as I've just been employed PAYE. I remember the form.

Presumably this money would go in the 'Employed' section. I'd put down the company name, and the gross income would be the sum of what's on my P60, plus this extra that I know about (instead of just copying the amount off the P60). The other fields (e.g. tax paid) would be copied off the P60 as normal.

I'd be expecting a follow-up call from HMRC to ask me if I've realised that I made a mistake when copying my P60.

Trying for a baby so if there is any trouble between the company and HMRC in the future, hopefully I'll be on maternity leave at the time. :rotfl:

HappyMJ

pinkteapot wrote: »

Thanks both. I'll try asking for a pay-slip (simple question, worst they can do is say no).

Re tax return - I used to do them as I used to be self-employed. Haven't done them the last few years as I've just been employed PAYE. I remember the form.

Presumably this money would go in the 'Employed' section. I'd put down the company name, and the gross income would be the sum of what's on my P60, plus this extra that I know about (instead of just copying the amount off the P60). The other fields (e.g. tax paid) would be copied off the P60 as normal.

I'd be expecting a follow-up call from HMRC to ask me if I've realised that I made a mistake when copying my P60.

If you declare it you put it under other income.

You really should speak to an accountant as some payments are not always considered income. This payment might not have to be taxed.

pinkteapot

I'll have a look at the form. I remember there being an 'Employed' and a 'Self Employed' section, as well as a bit for interest on savings. Is there another one for 'Other Income' which is just money you've randomly been given? Wouldn't I have to explain what it was or where it came from?

My husband's an accountant but sadly not a personal tax accountant. I don't know any unfortunately but we're talking about a reasonable chunk of tax so it might be worth paying one. This money was an additional salary payment for my main employment though (emails to say so) so I can't see how tax would be avoidable. Will think about the accountant issue some more before doing my tax return.

zygurat789

HappyMJ wrote: »

If you declare it you put it under other income.

You really should speak to an accountant as some payments are not always considered income. This payment might not have to be taxed.

It is certainly income.
Did the employee receive it because of his employment? If so it is taxable.
I think this migjht be 'Arry.

HappyMJ

pinkteapot wrote: »

I'll have a look at the form. I remember there being an 'Employed' and a 'Self Employed' section, as well as a bit for interest on savings. Is there another one for 'Other Income' which is just money you've randomly been given? Wouldn't I have to explain what it was or where it came from?

My husband's an accountant but sadly not a personal tax accountant. I don't know any unfortunately but we're talking about a reasonable chunk of tax so it might be worth paying one. This money was an additional salary payment for my main employment though (emails to say so) so I can't see how tax would be avoidable. Will think about the accountant issue some more before doing my tax return.

No explanations required. It's self assesment you put figures down and that's it. If they audit you then you explain.

It's number 3 on the tax return "Tips and other payments not on your P60" Read page EN3 of the notes.

twig1_2

You say the following

Last year, they (foreign company) cut a benefit that employees in the UK got. I negotiated with them as it was a very valuable benefit to me and so they offered a one-off bonus payment to partly offset the loss of this benefit. This is the payment in question which was received in March.


Did you get properly taxed for the benefit in previous years? You should have received a benefit in kind statement from them with the monetary amount that would have been declared to the HMRC in a P11d . They probably don't want all the other employees that didn't negotiate for a sum of money to cover the loss of benefit to know the accountant being one of them maybe. What is the benefit that has been cut?
I think your honesty is commendable. You are responsible for making sure you pay tax on all your income. The errors of the company are not an excuse. Pity the revenue is so frustrating to deal with if you can actually speak to someone before you are cut off.

chrismac1

Other income from overseas. You give the name of the foreign company and the amount received, this is nothing to do with your P60 which is what your UK employer has paid you.

This is not that unusual. Expatriate relocation frequently involves payments to staff from both the UK and the overeas side. I really think some posters on here are making a mountain out of a molehill.

No-one in this thread - unless they are aware of the foreign country concerned and are aware of the tax rules in that particular country - has enough information to comment on the tax treatment of this payment to you, and whether or not the company paying you this money has complied with its legal obligations. To give just one example, tax rules in Former Soviet Union and its satellites are very different to Western Europe.

The OP has an obligation to correctly account for this, by self-assessment or otherwise. That is all, no more and no less.