"We'll pay your tax for you" Scam? Exploitation?

[verdantverdure]

My nephew has a job in a pub and is paid in cash.

The boss told him he's getting less than the minimum wage for his age because "we'll pay your tax for you" but has taken no details. No NI number, no address. Nothing.

I've never heard of such a thing. Is this legal?

Could my nephew get into trouble?

Your nephew needs to check whether he can see flames coming from his boss’s pants, because I think they might be on fire.

Your nephew has a cash in hand job.

They are not paying his tax. He has a cash in hand job with a very dodgy boss. Bet if your nephew mentions ringing the tax office he will no longer have a job.

No, it's not legal. Boss needs to pay minimum wage. Your DN is entitled to earn £12,570 before he has to pay any tax at all anyway. I agree with @purplecorkheart that they'll just stop employing him, though.

However, I'd tell them to shove their job and look for another one if I was DN. Minimum wage is shit enough.

Thanks everybody. I didn't think it could be ok, but it seems such a nice respectable place with high prices so I don't know why they can't pay proper wages.

Your nephew finds himself another job, you report the place to the licensing authority and HMRC.

It is not a respectable place and should be closed down, or the licencee banned.

I'm sure if you named the place someone would report it for you.

As others have said, utter bunkum. I'd report them to HMRC. Breach of NMW regs, they'll be dodging employer NI contributions and presumably not set up for pension auto-enrolment (for those that are eligible). I'd hazard a guess at no contract or payslip either, breaching employment law.

www.acas.org.uk/national-minimum-wage-entitlement/if-an-employer-does-not-pay-minimum-wage#:~:text=If%20someone%20has%20not%20been,someone%20the%20person%20works%20with.

He won't be covered by employer liability insurance because theoretically he doesn't exist.

If a company pays tax on your behalf then that itself is a benefit and needs to be taxed. It's all quite complicated. I think they are having you on to sound impressive but actually avoiding paying Nic and pension conts and hoping you don't question this generosity.

I don't see how they could be "paying his tax for him" without taking the details they would need to do that.

There'd be a payslip breaking it down, surely? Or an app or something?

They would need his details anyway to make sure he was paying the right amount of tax (if he owes at all) and file with HMRC every month.
Sounds dodgy as anything. Are they trying to say they are paying the salary net of tax, but again they would need his NI number to record this.

They have asked for no details and he hasn't signed anything or recorded his hours anywhere.

Get him to set up a HMRC Personal Tax Account, he’ll soon see if they are paying his tax or not.

Is that a self employed thing?

No, I have one and have never been self employed. He’ll need a driving licence or passport for id plus will need to answer some extra id questions (usually people use their most recent payslip as id but obvs not in this case).

He needs to choose individual when it gets to that part.

Thanks @maddiemookins16mum

How old is your nephew? Are there other places he could work?

Also he needs to be registered with HMRC to start to build up his NI contributions to help towards getting full state pension. I'm glad to say my 7 hour per week Saturday job at 6th form count as full years, so technically that's 3 years less to work the other end before I can claim my full allowance.
I would check he is registered, if not look for another job.

I worked as a teenager. They told me they would pay my NI. I got cash. They did pay my NI. Though that was the 90s and cash was more common.

Well all employers pay employees tax, as in they deduct it and pay it over. But if they have not asked for his NI number and he doesn’t get payslips then I doubt very much that this is a legal arrangement.

They did take my NI number etc.

I don't think there's any record that he is even an employee, and without his details I don't know how they could pay his tax for him.

So he just started working one day with no employment contract?

Yeah. He worked a few "trial shifts" then one day the boss gave him money at the end of the day. It was when he queried the lower than minimum wage amount that he was told it was because they were paying his tax for him.