Possible payslip fraud by employers

chrisbur

agrinnall wrote: »

I can't really understand why anyone would agree to a net payment amount such as this, as the only winner in the long run will be the employer, while the employee has both an annual pay cut and the value of the pay is constantly eroded by inflation.

As you say not a very wise thing to agree to in almost all cases; but I do not think that the OP understands a great deal about tax etc. In their old thread they said....
"Can someone explained these tax in a nutshell as I vaguely know about paying a certain amount and this count towards my pension, correct?"

rkc86

Evening all

Very much appreciated with all your feedback. Chrisbur, nice of you to find my old topic haha. I'll try and summarise what I've found out.

When the mortgage broker requested my 3 months payslip (Mar, Apr, and I've said I will give them May in a few days time), they noticed that the Mar gross total pay to date figures does not match the net pay I have been receiving each month for that tax year.

So going back on my old thread, I was put on part-time salary from Sept - Feb but was still paid £1200.00 each month (I believed they were doing this to avoid paying extra to HMRC but I didn't raise the issue). So when the time came that I was interesting in purchasing a property, I've told them to fix and correct my payslip to the right amount back in March, hence the net pay for Mar on my payslip is £1200.00 but the total gross pay to date was something like £9800.00, which is obviously incorrect if you work out the maths.

I've just looked at April payslip, which looks correct as WestonDave has pointed out, £1402.40 gross, £113.60 PAYE Tax & 88.80 N.I.

Also as April was the new tax year (please correct me if I'm talking gibberish), the amount of gross paid to date tax is the same amount of above (which is stated on my payslip for Apr), therefore I assume that May will be the same and the total gross, all tax paid to date will be £227.20 PAYE Tax & £177.60.

So if I'm correct, I can wait for June payslip so I will have Apr, May, Jun payslips to show my correct salary and the total correct gross and tax paid to date.

Or explain to the broker that I've had a salary increase in Mar hence why the total gross paid to date figures does not match the net salary I have been receiving.

Hope this helps

mountainofdebt

Still not convinced you understand the mechanics of the tax system.

If you receive the same figure every month, then every new tax year (assuming the amount that you can earn before paying tax increases) you are effectively losing out and receiving a pay cut equivalent to the increase in this tax free amount.

Might be worth having a look at this https://www.gov.uk/income-tax

antrobus

Paying an employee on a 'free of tax' basis
http://www.hmrc.gov.uk/payerti/payroll/special-pay/free-of-tax.htm

BillJones

I still don't see where any possible "fraud" has been committed by the employer, or why the OP would even think that it is likely.

They've asked for a highly unusual salary agreement, got it, and all seems to be happening as would be expected.

OP, who do you think that your employer is seeking to defraud, and how?

rkc86

aMorning

Mountainofdebt, could you please explain what you mean by losing out and receiving a cut?

Maybe fraud was a bit too strong, probably dodgy is the word I was looking for but I think it's starting to make sense.

So if my agreed fixed net pay for each month is unusual, how would you go about it? Ask for a hourly wage or something else?

Thanks

BillJones

rkc86 wrote: »

So if my agreed fixed net pay for each month is unusual, how would you go about it? Ask for a hourly wage or something else?

Thanks

I agree the gross figure with my employer, and then of the tax levels change, my net salary goes up or down on the back of it. This is how pretty much everyone is paid.

The "losing out" piece means that the tax-free allowance tends to increase over time (and has done so quite heavily in recent years). Had you been on a more normal arrangement you'd have seen your net take-home pay increase as a result of that. Instead you'll have seen your gross pay dropping as the employers pay you less to keep your net pay constant.