Wife been told no longer salaried, has to sort NI and tax - advice please :)

puddles

Looks like the chat isn't happening - she now wants us to email any questions. Wife is now job hunting. What a pain. Thanks again all!

ohreally

puddles wrote: »

Looks like the chat isn't happening - she now wants us to email any questions. Wife is now job hunting. What a pain

A paper trail to tax evasion, what's not to like 😀

puddles

That did cross my mind - evidence should we need any down the line!

puddles

If she did agree to be paid in cash (just until she finds something else) BUT declared every penny, as we would do, would there ever be any comeback for my wife?

She'll still be an employee, in every sense of the word, as she won't tick any of the boxes of being self-employed, aside from sorting her own tax and NI. I understand what her employer will be doing is basically tax evasion, and illegal, but my wife knowing this, could she get in trouble?

*~Zephyr~*

puddles wrote: »

Looks like the chat isn't happening - she now wants us to email any questions. Wife is now job hunting. What a pain. Thanks again all!

Why doesn't your wife go mobile? She has the experience, she has the contacts. Normally, I would say it's bad form to steal customers from an employer, but the despicable way her employer is asking makes me think screw her - take as many customers as possible!

A lot of people would like their hair done at home, and working for herself would give her flexible hours. What's not to like?

Yes, she'll have to do a tax return, but they really aren't that difficult. She could keep all the records she needs in an A4 book which would double as her appointments diary. ( I do the books & tax returns for several of my friends - its really simple as long as you keep meticulous records).

LittleVoice

puddles wrote: »

If she did agree to be paid in cash (just until she finds something else) BUT declared every penny, as we would do, would there ever be any comeback for my wife?

She'll still be an employee, in every sense of the word, as she won't tick any of the boxes of being self-employed, aside from sorting her own tax and NI. I understand what her employer will be doing is basically tax evasion, and illegal, but my wife knowing this, could she get in trouble?

Only problem I see for your wife - if she declares everything, pays income tax and any Class 2 and Class 4 NI due - is that, as a SE person, she would be well advised to have professional indemnity insurance in case a client were to try to sue for incompetence/adverse reaction.


If all the indications are that she would in truth be an employee then if she left she could then inform HMRC who could look to the employer to pay the income tax and NI (employee as well as employer) as though the payments made to your wife were nett of those deductions.

Derwent

puddles wrote: »

If she did agree to be paid in cash (just until she finds something else) BUT declared every penny, as we would do, would there ever be any comeback for my wife?

She'll still be an employee, in every sense of the word, as she won't tick any of the boxes of being self-employed, aside from sorting her own tax and NI. I understand what her employer will be doing is basically tax evasion, and illegal, but my wife knowing this, could she get in trouble?

You need to understand that there are 2 forms of NI - employers and employees. Employers NI is calculated as a % of the gross wages and is something that the employee would never see on their payslip or need to be concerned about as it is paid directly from the employer to HMRC and is over and above their gross wage.


Your wife can't simply "sort her own tax and NI" if she is still employed by this business. She could deduct her own "employees" NI from the cash payments and send them to HMRC, but who is going to pay the employers NI ?


Furthermore, there are other issues which would need clarifying, the biggest of which would be insurance. As an employee she would be covered by their Employers Liability Insurance, Public Liability insurance etc but as a self-employed worker she would need to provide her own.

puddles

Thanks for these replies - helps immensely. I am taking the route of asking for clarification on what she wants to do, whilst pointing out a few potential hurdles (the law) on the way. We are doing so in a friendly rather than attacking or defensive manner. Maybe knowing we know what we are talking about thanks to everyone here) will make her realise this isn't the best route for her to go down as an employer.

Kayalana99

Your over complicating it personally, I don't agree with what the business owner is doing but at end day it's nothing to do with you or your wife. (I don't mean that as you're being nosy, I mean that as what she does that gets her into trouble doesn't affect your wife at all unless she got caught and shut down etc and wife loses her job which is unlikey, but you can't make her declare the income.)

As far as you should be concerned, let her pay your wife however she likes cash / bank etc...your wife declares self employed fills in the right boxes and done. You start poking holes she might end up getting a new hair dresser in.

Andy_L

Your wife could be self-employed at the salon but has to "rent a chair" (google that term & there's loads of guides from various organisations)from the owner and set herself up as a proper small business

http://www.hmrc.gov.uk/manuals/vtaxpermanual/VTAXPER68600.htm
http://www.hmrc.gov.uk/manuals/vtaxpermanual/vtaxper69100.htm