Not being paid as a contractor

lynzpower

I did some contract work for a company earlier in the year ( March- June) they still havent paid me for it.

i threatened by email to take them to the small claims court if my money wasnt paid in 2 weeks.

Its now 4 weeks, and although they have sent me a payslip and my P45 no cash has turned up.

Im now raring to just get this sorted via the small claims track, I cant be bothered to keep pressing them and them fobbing me off.

However, do I need to do another Letter before action ( in hard copy form) or will the fact ive warned them via email be enough to commence a claim?

Conor_3

By contract, you mean as self employed?

If that's the case, you have no right to a P45 and I hope you registered for Self Employment with the IR.

You need to do things in writing, preferably by recorded delivery, to remove all doubt/excuses about not receiving it.

lynzpower

I dont need to register with the Inland revenue as yet , I was told that I simply pay tax out of my earnings. as i havent earned anything yet ( they havent paid me) I have not paid y tax yet on these earnings . Of course I intend to. its only a smallish amount of cash im owed, IR will be due less than 50 quid ( I work full time, this was part time contracting)

I know they have recieved the email as they replied to it. I wanted to use email so I can cut & paste thier responses into the MCOL boxes.

Zazen999

Hi.
Confused about the P45; but anyway.

Have you invoiced them for the work done?

You do need to register as self employed within 3 months of becoming self employed; not within 3 months of getting paid for it; or you could be fined £100 [sorry, but am registered myself].

Conor_3

lynzpower wrote: »

I dont need to register with the Inland revenue as yet , I was told that I simply pay tax out of my earnings. as i havent earned anything yet ( they havent paid me) I have not paid y tax yet on these earnings . Of course I intend to. its only a smallish amount of cash im owed, IR will be due less than 50 quid ( I work full time, this was part time contracting)

So you were self employed? If not, ignore the following but if you were...

YOU'VE BROKEN THE LAW. You must register for Self Employment WITHIN THREE MONTHS of commencement. That's 8 months ago. The fact you've not got paid is irrelevent. The fact you work fulltime and this is part time contracting is irrelevent.

You don't pay the tax out of your earnings - you complete a self assessment form which is sent to you and then you get a tax bill, not that you'd know this because you've not registered AS YOU WERE LEGALLY OBLIGED TO.

I'd love to think how you think you're going to explain this income to the tax man without dropping yourself in it for not registering as self employed as you were legally required to do by June at the latest.

If you think the IR is only going to be due £50, you're wrong as there's at least the thick end of £90 worth of Class 2 NI contributions you've not made. Add to that that if you started in the previous financial year that technically if you've not submitted a tax return by January 31st and paid any tax due for the year April 6th 2006 - April 5th 2007, you could be fined.

If you think the tax bill would only be £50, I guess you only earned £200 tops. If I were you, I'd treat it as a lesson learned and keep quiet about it and register as newly self employed starting today if you're still doing it. The amount of fines you've left yourself open up to far exceed the money you've lost.

lynzpower

Ive earned £108. ( although whether it turns up or not i dont know!) I thought that I would probably pay emergency tax on it. this was all told to me by the employer. I pat the tax out of my wages.

I was naive and to be honest, way too busy, and just didint really consider it. If I lose all of it then lesson learned i suppose.

Savvy_Sue

I know Conor's been a bit doom and gloom, and I'm not disagreeing with the facts as he presents them re: self-employment, BUT if the employer has sent you a P45 and a payslip, then the employer is treating you as employed, IMO. And will therefore have sorted tax and NI - are they shown as deductions on the payslip you say they sent?

Certainly if they are, then I wouldn't hesitate to write saying that not to have paid you is illegal deduction of earnings, you expect the cheque within 7 days and if you don't receive it then you will have no option but to apply to the small claims court.

Wait and see if anyone disagrees with me, but meanwhile you could look at other threads about people not receiving their final pay cheque.

Zazen999

Hi
If they have sent you a payslip and P45; you do need to find out what account they had on file for you - and track the payment through. Usually if you get a payslip this means they have agreed the payment and perhaps making a polite call to see what the account number they held might just be the issue here. If this is correct [and the sort code etc]; then you need to take it further. Speak to the person in charge of the payments rather than yoour contact as they might give you a better answer.

lynzpower

thanks

they definately have the right sort code and acc no, Ive sent it through to them 4 times now and they have confirmed that they now have it on file.

The problem is that every time I call them they fobb me off so badly ( ill get X to call you back - then they dont) or that they simply dont answer thier mobiles when its ringing. I have had my manager on MSN- she was replying when I was asking about the money and now she just blanks me.

To be honest, I dont know how much longer I can do this. Either I write the money off ( no chance! even if the IR gets all of it, then at least SOMEONE sees the benefit) or I sue them to get it back.

Does anyone know DO I HAVE TO DO A FORMAL WRITTEN LBA OR CAN I JUST FILE THIS AT SMALL CLAIMS NOW?

Savvy_Sue

I'd do an LBA whether you need to or not: if you can quote what law it is they've broken in that it may help, and it will save the costs of the small claims court. Try googling 'illegal deduction of earnings' or looking on the ACAS website - but remember all this is acting on the assumption that they are treating you as an employEE. Did they deduct tax on the payslip? Or is the gross amount shown there and on your P45?

lynzpower

amazingly last night she actually replied to me on MSN. She claimed she was staggered I havent been paid yet, and promises Ill be paid by the end of the week.

We'll see, if not ill do my LBA then.