Tax underpayment made to look as salary overpayment by employer. Helppp plesse

parado

My employer is claiming that he has overpaid me and is harassing me for £1300 that represents the sum accumulated over 3 years. However, when I am checking the reconciliation he sent me, I can see that that amount he is asking every month is equal to the amount of tax I was supposed to pay for the month. For the record, he never gave me a payslip during those 3 years, every time I asked for one, he said yes he will run payroll soon and I will get it. Now that he wants money from me, he has generated all the payslips and sent me. I don't know if I can ever trust these. Furthermore, he always paid me late (via a direct debit to my bank account) so it was very hard to keep track of what he was paying for. I suspect, he has been avoiding tax and may be he has been made to pay the amount owed by HMRC and he is now harassing me and threatening me to get the money back from me. What should I do?

Helpp pleaseeee

Thank you!!

zzzLazyDaisy

It is difficult to know how this could have carried on over a period of 3 years. Didn't you get a P60 each year showing your wages and how much tax has been deducted?

Whatever, if you suspect that the employer has not been deducting tax under PAYE and is now seeking reimbursement, I suggest that you contact HMRC and ask them to check your tax records before you go any further, as in some cases liability rests with the employer and cannot be reclaimed from the employee. HMRC will investigate and make a decision on who is liable for the unpaid tax (if any) depending on the circumstances.

More information here

http://www.hmrc.gov.uk/thelibrary/tax-paye/employer-errors-deduction-paye.pdf

parado

zzzLazyDaisy wrote: »

It is difficult to know how this could have carried on over a period of 3 years. Didn't you get a P60 each year showing your wages and how much tax has been deducted?

Whatever, if you suspect that the employer has not been deducting tax under PAYE and is now seeking reimbursement, I suggest that you contact HMRC and ask them to check your tax records before you go any further, as in some cases liability rests with the employer and cannot be reclaimed from the employee. HMRC will investigate and make a decision on who is liable for the unpaid tax (if any) depending on the circumstances.




Thank you for your reply. No, he never gave me a P60. He just sent them along with the payslips recently. I know he pays another company to run payroll and each time they run payroll they charge him. He has been trying to avoid paying them I guess.

charlotte4940

Do the p60's he sent you recently show you paying any tax?

parado

Yes, they do show that. But all this time he never made any deductions for PAYE from my salary.

WestonDave

Does the gross amount before tax tally with your stated salary in your contract (he asks expecting that no contract was ever issued - in which case the salary that was agreed!). If it does then to some extent you have been overpaid in that you've had money that should have been deducted and paid to HMRC. Whether its recoverable or not is open to question!

The alternative if there is a lack of agreement is that in effect he has paid you net, and that the gross amount should what you got plus tax and is due from him.

The tricky bit is managing this and maintaining a job albeit that after 3 years you have a degree of employment security.

parado

Yes, the gross is as stated in the contract. However, I never worked more than 20 hours in a week at a rate of £12/h. This means that I rarely earned more than what was in my personal tax allowance. Although I asked him once why does it look like he is not deducting any PAYE from my salary he said not to worry, it is ok as I am still within my allowance.

chrisbur

parado wrote: »

Yes, the gross is as stated in the contract. However, I never worked more than 20 hours in a week at a rate of £12/h. This means that I rarely earned more than what was in my personal tax allowance. Although I asked him once why does it look like he is not deducting any PAYE from my salary he said not to worry, it is ok as I am still within my allowance.

If you "rarely earned more than what was in my personal tax allowance" not sure how the figure of £1300 in tax came to be. I think to understand whether this tax figure is correct or not you need to give some actual figures to work with. Gross and tax from the P60s to start with.