Working 'cash in hand'

Jonee

Not sure if this is in the right forum....but i`m sure the moderaters will move it if needs be....

ANYWAY....long story cut short...
Been working cash in hand for the last five years....(was meant to be temporary for three months to help out while another employee was off sick!)....however this employee passed away due to cancer and somehow I`ve carried on working....hasn`t been full time...max I suppose is 25 hours a week and my boss has been paying me £6.20 for the first 16 hours then £5.00 each extra hour.....as far as I am aware he had already told his accountant about this arrangement and all was fine....so carried on working....now due to the new laws that coame into effect April 2013...he apparently has now got to declare that I`m working for him????....Does this now mean that I am going to get a nice big tax and NIC bill through my door from HMRC....and as we agreed in the beginning it was 'casual'....he has come unstuck and am I now going to have to pay for his mistakes?????
Before anyone goes into overdrive and says I caused this myself...I know I`ve done wrong....but now has got out of hand and I`m panicking a bit as I don`t have the funds to pay any unexpected bills that fall on my doormat....Sorry....:)

de_g.

Jonee wrote: »

Not sure if this is in the right forum....but i`m sure the moderaters will move it if needs be....

ANYWAY....long story cut short...
Been working cash in hand for the last five years....(was meant to be temporary for three months to help out while another employee was off sick!)....however this employee passed away due to cancer and somehow I`ve carried on working....hasn`t been full time...max I suppose is 25 hours a week and my boss has been paying me £6.20 for the first 16 hours then £5.00 each extra hour.....as far as I am aware he had already told his accountant about this arrangement and all was fine....so carried on working....now due to the new laws that coame into effect April 2013...he apparently has now got to declare that I`m working for him????....Does this now mean that I am going to get a nice big tax and NIC bill through my door from HMRC....and as we agreed in the beginning it was 'casual'....he has come unstuck and am I now going to have to pay for his mistakes?????
Before anyone goes into overdrive and says I caused this myself...I know I`ve done wrong....but now has got out of hand and I`m panicking a bit as I don`t have the funds to pay any unexpected bills that fall on my doormat....Sorry....:)

This is a mess, and you need to get proper advice! However...

You do realise that your boss is breaking the law by paying you below National Minimum Wage? Assuming you're over 21 (likely if you've been working 5 years) then the NMW is £6.19ph; your current hourly rate works out at £5.77ph - if you were to complain to HMRC he could be forced to pay back up to that level for the whole period he's been underpaying. Based on your current rate, that would work out at around £500 for this year.

At your current rate of pay, putting aside the NMW issues, you're earning around £144pw which was below the PAYE threshold and below the Primary Threshold for NICs for 2012-13 and 2013-14. However, the thresholds have risen recently so you may have to backdate for earlier years.

The other problem with your current arrangement, is that you may well be missing out on benefits you are entitled to claim, such as Housing Benefit.

Nada666

Were you paying tax and declaring yourself as self-employed? If not it is your mistakes not his mistakes that you will be paying for.

Was this your sole income or were you working elsewhere (or stealing benefits?)

C_Mababejive

Well it was good while it lasted. Look for another cash in hand job ??

withabix

If the OP has been working cash-in-hand, not declaring it and possibly claiming benefits as well, it sounds like trouble.

anamenottaken

Nada666 wrote: »

Were you paying tax and declaring yourself as self-employed? If not it is your mistakes not his mistakes that you will be paying for.

Was this your sole income or were you working elsewhere (or stealing benefits?)

HMRC may well take the view that the OP was an employee and therefore the pay he received was nett pay (ie the employer had deducted tax and NI before paying).

This might sort out the NMW under-payment possibility.

It also means the employer, not the OP, is liable to hand over the tax and NI (on the grossed up amount).

anamenottaken

withabix wrote: »

If the OP has been working cash-in-hand, not declaring it and possibly claiming benefits as well, it sounds like trouble.

Glad you used "If" at the beginning of that statement.

There is no suggestion whatsoever that the OP has been claiming benefits without declaring the income.

There is no law against receiving cash rather than cheque or BACS payments. It would be for the employer (if the OP is found to be an employee) who needed to advise HMRC of the payments.

Jonee

...thanks for everyones replies .....just to clarify...I am NOT claiming any benefits whatsoever....it was just a few hours a week that spiralled into five years...it was cash in hand and was helping me make ends meet...but as you say....all good things come to an end!!!!!......We`ll see what happens when I go in later??????

Nada666

Tax credits are not benefits? Oh. Good luck with not repaying them then if your incomes were not declared.

paulineb_2

I dont believe that any accountant would say an arrangement like that was fine. Also, what have you been doing to make sure your NI stamp was paid? It counts towards your state pension. If you had been signing on you'd have got credit towards your state pension, if not, you would have had to make the credits yourself although you can pay these in retrospect I believe.

Jonee

paulineb wrote: »

I dont believe that any accountant would say an arrangement like that was fine. Also, what have you been doing to make sure your NI stamp was paid? It counts towards your state pension. If you had been signing on you'd have got credit towards your state pension, if not, you would have had to make the credits yourself although you can pay these in retrospect I believe.

EXACTLY....but I`m not clued up with all the accountancy lark....but he said it was dealt with...who am I to argue?....