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Help Please! Employers not been paying tax where do I stand?

(25 Posts)
MyLittleOwls Fri 27-May-11 16:10:55

Just wanted a bit of advice please. A friend is in her first nanny position and has a meeting with my employer next week to iron out a few niggles and to clarify her position. She has been working for them for just over 6 months and they haven'y given her a contract, or been paying Tax or NI where do she stand? Would she be liable to pay the tax or them?

Thank you for any help smile

TheCrackFox Fri 27-May-11 16:16:14

Does she get pay slips? Have her employers been deducting tax and then not paying it to the Inland Revenue? If this is the case (she needs proof) then they are liable.

But......

Her employers could claim she is self-employed and that she should have been paying her own tax.

I think your friend should contact her local CAB to go through the issues properly.

MyLittleOwls Fri 27-May-11 16:18:19

No not been getting any pay slips at all.

MyLittleOwls Fri 27-May-11 16:50:59

Bump, bump, bump!

anewyear Fri 27-May-11 17:46:54

Im a chidminder, not a nanny so unsure if this is correct ( but Im sure someone will be along later to help) but as nanny she is employed by some one, therefore her employers shold be paying her tax and ins, and she really should have a contract.

cookielove Fri 27-May-11 17:54:14

You need nannynick he is fab with all this stuff, maybe pm him?

MiraNova Fri 27-May-11 19:06:08

did she agree a Net or Gross salary with them at the interview? and how does that amount compare to what she's been paid?

PickleMyster Fri 27-May-11 19:17:40

A nanny can only be self employed if they are a temp ad - hoc nanny working for quite a few families throughout the year - that's what HMRC to me when I enquired.

Has the family refused to pay her TAX and NI, or are they just "we'll get round to it tomorrow?"

Did she get the job through an agency? How has she been paid - cash, cheque, BACS? Has she got any record of how much she has earned over the past 6 mths. I think she needs to collect as much evidence as possible confirming that she has been working for this family continuously for the last 6mths.

Agree with Crackfox re contacting CAB.

On the contract issue - personal experience has taught me that I don't do a minutes work without a contract in place.

StillSquiffy Fri 27-May-11 20:07:32

It's illegal and she needs to address it. Pickle is correct in that there is an exception for part time nannies (and sometimes for ones doing nanny shares), but for normal full-time nannies they must be put through tax system and tax paid. In these circs the nanny is OK (and can even report her boss on the helpline) because it is the employer who is liable for all tax and HMRC will go after them, and not the nanny.

It could be that the parents are just hopeless (and they may technically only have missed two payments, because tax is usually paid quarterly) and at the moment it's not that serious - the parents just ring up the helpline and pay be credit card over the phone. They may get a £100 fine or something for filing/paying late.

She can easily raise it with them by requesting her P60 (annual statement). The last due date for issuing these to employers was 19th May (when the annual P35 return would have been due) so it would be perfectly normal to request a P60 at this point in the calendar year.

MyLittleOwls Fri 27-May-11 20:18:04

Thanks to all who have responded it is really useful, I have forwarded the link to my friend and will get her to answer some of the questions raised such as how she is paid.

I will be back grin

nannynick Fri 27-May-11 21:13:35

Written Statement - Employers are required to give the written statement to employees within two months of starting work.

A written statement is evidence of a contract of employment. A contract could be verbal. So it is this document which outlines the key points of the agreement, sets out things like Pay, Working hours, Holiday entitlement, Job description, disciplinary procedure.

cinpin Fri 27-May-11 21:24:41

This happened to me the employers are the ones in the wrong.

I did not have wage slips but the in land rev got the money of them not me,

diggingintheribs Fri 27-May-11 21:31:44

I've just started using a nanny and I looked into this

they can not claim she is self employed and they are responsible for the unpaid tax. So she shouldn't worry about that

frakyouveryverymuch Fri 27-May-11 21:34:46

Does she have nanny insurance? If she foes and it includes legal advice then this is what she's paying them for and she's should get on the phone to them.

If not she needs to take responsibility for contacting HMRC and reporting her employers. She can warn them she'll do this if they don't sort it within x weeks and hope they see sense or she can just call.

Either way she isn't liable.

MyLittleOwls Fri 27-May-11 21:38:32

Thank you nannynick and cinpin, very useful info.

Sorry OP was a little confusing, was typing in a hurry.

The facts are no pay slips, contract or written statement. Just very loose promises. Amount being paid to friend is around about the Net figure paid to nannies in this area and she fulfills the criteria for an employee as opposed to self-employed as laid out by HMRC.

What should be the next step? CAB, Acas?

Her employer is not a 'listener' so not sure how productive planned meeting will be but ideas as to how to approach it gratefully received.

cinpin Fri 27-May-11 21:52:28

Well I had no contract wage slips or anything. I just phoned the inland rev up and said they had not deducted tax. MB then said I was self employed which was untrue but the inland rev said they should have asked me for proof, so they were in the wrong.

They had to pay my tax in the end.

PickleMyster Fri 27-May-11 22:07:23

If she was working for her employers on the 5th April 2011 they MUST issue her with her P60 by 31 May 2011. They can not withhold it. She needs to ask them for it and if they refuse or fob her off, then she needs to contact HMRC. You mention that it's her first nanny position (so I am guessing she is quite young) but she needs to stand-up for herself. The law is on her side and her employers are NOT above the law.

http://www.hmrc.gov.uk/helpsheets/e10.pdf

I have had something similar happen to me, luckily my former employer realised I wasn't going to let it lie and did eventually pay. And i know of another nanny friend who did report her previous employer. Trying to get out of paying TAX and NI does go on quite a bit so she's not alone.

mranchovy Fri 27-May-11 23:42:24

The end of year/P60 information is irrelevant. Each and every time an employer makes a payment to an employee they MUST calculate and deduct (from gross pay) tax and national insurance. They MUST give the employee on (or before) the same day a payslip detailing the amount of pay and the deductions made.

So this is what to do:

1. keep your eyes open for another job because it is unlikely that this is going to end up as a successful long-term position

2. ask the employer why they are not providing payslips and have not provided a written statement of employment particulars. If they say they will when they get round to it, set a deadline (the end of June would be reasonable)

3. when they fail to come up with everything (i.e. payslips for each week/month going back to the start of the employment, a P60 for 2010/11 and a written statement), report the tax fraud to HMRC using the contact details here. Probably best to use the telephone hotline, then you can ask HMRC what will happen next and the timescales involved

4. if they sack you, or threaten you, go to ACAS and/or call your insurer to see if you have legal expenses cover

thehiddenpaw Sat 28-May-11 21:28:09

am curiuos, am an employer of nanny since April and have sent HMRC nanny details but still received no tax code. So how am I supposed to comply with payslip showing tax deduction and NI. Plus she has not got her P45 back from last job. I have offerred an interim payslip as this in month 2 and it shows what I think I should deduct. But on the surface, she may have felt like the friend of this poster- no payslip on month 1 because I had no tax code. I have yet to give her payslip for month 2 but it is drafted ready to go. HMRC have sent me paying in boooks and told me to pay by July 5th but no idea what to pay them due to lack of details. i am going to ring them next week to chase them as am off all week but looking at these posts, it is worrying position to be in and no fault of mine or nanny as she has requested P45 too

nannynick Sat 28-May-11 21:38:39

thehiddenpaw - So the nanny completed a P46 and you sent that in?
Are you following the P49 guide? The guide tells you (page 18 I think) which tax code to use initially, based on what was put on the P46.
Are you completing a manual P11 or are you doing it online?
Are you doing PAYE or Simplified PAYE?

nannynick Sat 28-May-11 21:44:26

thehiddenpaw - I presume you are not using a payroll company. Perhaps using one for the first year would help as they do a lot of the work for you. Cost is around £125. www.payefornannies.co.uk is currently who does mine.

The HMRC new employer helpline may be able to help you get things started with the payroll forms.

sprogger Sat 28-May-11 21:50:52

Message withdrawn at poster's request.

thehiddenpaw Sat 28-May-11 22:28:36

thanks to those who posted. That p49 great, why did HMRC not send to me. makes sense and had never heard of P46 they sent me a registering new employee form which was not the P46. So just shows the info is there just need to know what to look for and I really appreciate it. Am using simplified PAYE. Might move to the payroll schemelike paye for nannies as had assumed I would be well in place by now with by month 2 of payments and need to be sorted for end of June. Will have a good walk though the _49 guide and see whether I try a payroll comapny out or not. feel like i should be intelligent enough to figure it out...just might run out of time with baby due in 6 weeks

nannynick Sat 28-May-11 22:41:47

Simplified is different, so see Simplified for documents related to operating that scheme, including Employer Pack which may be what they have sent you (the P16 I think tells you how to operate the scheme).

mranchovy Sun 29-May-11 17:52:41

The operation of simplified PAYE is actually more complicated than 'normal' PAYE as you have found out!

But now you have started down that route, the quickest solution may be to chase up HMRC - they should have sent the deductions card by now (assuming you completed and sent in the P16A and ticked the box saying you needed a P12 deductions card, otherwise they will assume you are using the online version). Call them on Tuesday and they should be able to sort it out - they should certainly be able to tell you what tax code to use over the phone.

Alternatively, and probably best in the long run, tell them you want to switch to 'normal' PAYE. Either use an agency or do it yourself using HMRC's basic PAYE tools, or cheap (or free) payroll software or online service.

Whatever you do, don't mix up the forms and procedures for the simplified scheme which have been sent to you in the Employers Pack with the 'normal' scheme.

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