To think it's an outrage employer isn't financially responsible?

[ToeSucker]

Working for start up.
There are a million issues with dirty politics, toxicity etc.
My big problem is they started paying staff via revolut and are not paying HMRC, NI or student loan contributions. Instead they're just paying the net pay amount via revolut and the rest of the money is going missing.
They've stopped paying contractors too. They're ghosting them.

We just got a 50k investment and loads of people who were meant to be paid have not been. CEO insists they have been.

I have just found out CEO told other founders my ex-colleague and friend phoned him asking for equity instead of expenses money they're owed. This never happened according to my friend.

I have my resignation letter sent. I am going to escalate to HMRC etc but everyone seems very casual about this when it seems quite serious. AIBU?

Also action fraud deal with this sort of thing. Not the police. Only call police if organised crime is involved

Just got a £50k investment Who from? One of the directors or a third party?

Is it a company registered at Companies House or a sole trader/ partnership?

What is your role within the business? Have you only just realised that payroll deductions are not being paid across?

The directors are responsible for safeguarding the assets of the company and the control systems. Who is on the board? Are they as young and naive as they sound?

What is the companies financial year? Do they have previous accounts filed at Companies House? If so can you see auditors.

I would suggest you contact your MP - they are usually effective at getting HMRC to start an investigation.

Another route might be VAT as unlikely they are filing quarterly..

When a Nursery near me shut due to fraud by the owner it was discovered that as there were no proper records and NI etc had not been paid some staff had got top up benefits "fraudulently", had benefits stopped immediately and were threatened with prosecution.
It was sorted out in the end but a very stressful time for the staff affeected who had not only lost their jobs but had that to deal with as well.
It can be more serious than just loss of earnings

No just net pay

Well, technically you’re not. With no payslip, they’ve just decreased your gross pay and you didn’t realise.
You now need to pay tax on your ‘new, lower’ gross pay, as well as NI.

They have defrauded you and they are defrauding HMRC.

Yes this is what HMRC said

This happened to my son with a start up company. They kept saying things were fine they just had a cash flow problem. He never got paid and they folded soon after. Just his experience. Hopefully not yours.

I think start-ups are mainly started by crazy people. It's not the nature of the job. They're just completely detached from reality.

You will be liable for the tax you owe!

The £50k investment sounds like money to try and keep the thing afloat. Pay the person who should the loudest.

Op do you have a company pension? Because you can guarantee that the money that should be getting paid in there won't be either.

I honestly think its time to look after No1 because nobody else is going to.
Get yourself a new job

I’ve been in this situation. My employer paid us but didn’t give us payslips due to an “admin problem”. They didn’t pay NI or PAYE to HMRC or our pension contributions to our fund. Then they went into liquidation.

The upshot is that HMRC initially wanted employees to pay self assessment income tax on our net pay, which was ultimately waived after the liquidator got involved. But the NI was just shown as missing and the pension was just a creditor that got 8p in £ about 3 years later. Upshot is that I have two missing years in my NI record, despite paying NI in full and will be down in my personal pension when I retire due to missing contributions in my 20s.

I was advised at the time that getting solicitors involved before liquidation and threatening a tribunal was the solution as it created the paper trail about the problem which HMRC could have used to treat NI differently. Also that the pension fund would have been a preferred creditor so would have got most (though not all) of our contributions from the liquidators.

The owner of the company is a multi millionaire and the missing money would be chicken feed to him. An absolute shit of the highest order.

Report to HMRC- as they are not a huge multinational it's unlikely they will get away with this- their new investment will be used to pay NI and HMRC first.
Tax law is quite strong.
English company law however is very weak- so look out for them going bankrupt on a Friday night and leaving everyone unpaid and opening up Monday morning with a slightly different name and pulling the same nonsense- there's nothing to stop you until it al goes through the courts, which can take years.

You are absolutely right. Apologies for my sloppy wording.

I was trying to assure you that your future pension need not suffer because of your dodgy employer, but I realise that's no help right now.

TBH if its only a couple of years missing you should be ok. Do a pension forcast depending on age is 30 years or 35 years of full NI contributions gets you your full pension.
The likelihood is you'll start work by 22 finish work around 67 thats around 45 working years, so you can make up the full 30 /35 years without the 2 missing years in your 20s.

Another option is to pay up the missing years, you can go back 7 years but thats probably only worth doing if you've missed a few months not a full year

I've got 29/30 years and still have 16 years to retirement.

For those saying that they can’t do this - I’m afraid they can, a lot of company’s big and small go into liquidation or admin owing vast amounts to HMRC, be it PAYE, Ni or VAT , often all of them - if it’s quite large amounts HMRC will go for ‘wind up’ at some point or before then the company will voluntarily liquidate. Have you checked on companies house OP if they are already in liquidation or wind up - ? It’s unlikely as they don’t usually have access to bank account at that point - and yes, you will then have gaps in your NI record - although it’s unlikely they will make you personally pay up if the circumstances are known about - many companies do pay their obligations months late but eventually pay up - the fact they are paying you via a different bank account does make me wonder if the other accounts are frozen and Revikut failed to notice a ‘wind up or CVL ‘

Acas can't advise on the tax/ni issue- that is a HMRC thing. This might be helpful:https://assets.publishing.service.gov.uk/media/5a7debd8e5274a2e87dae625/employer-errors-deduction-paye.pdf

Unfortunately deduction of wages claims to a tribunal don't always work in these circumstances as the employer does have the right to deduct tax/ni/pension and the fact that they haven't handed it over to HMRC or pension company doesn't change that fact.

You can make a claim for no payslips though. Compensation is limited to unnotified deductions made in the last 13 weeks so you may want to start this sooner rather than later (also as I suspect the company will be going under soon)

I work in this sort of area and we've seen a big uptick in situations like this.

To the people saying OP will have to pay the NI and tax and/or forfeit her contributions, no this is not the case if she is only receiving the net (and can prove it). The employer has withheld the tax/NI, and is supposed to pay it to HMRC. Therefore the liability is theirs. (Something similar happened to me, only in my case they were actually still running a payroll internally, though not paying hmrc anything, so it was easy to prove. I got all my NI credits too.)

What I don't understand is how it can be both 1) they deducted PAYE and NI and didn't give it to HMRC, so I owe it to HMRC 2) they also don't owe the money to me as it was deducted for PAYE and NI

This is the problem. You can get away with it by just not generating payslips!

Op you NEED to get out of there.
A few years ago I was with a medium sized business. They were looking very ropey. Bills not being paid etc.

The Accountant whos own wages were at risk, ran the payroll a day early, the recievers were called in the night before he should have done that payroll.

If he hadn't used his knowledge of the business and took the risk, none of us would have been paid that month. We would have been classed as creditors the same as any other creditors. Getting a fraction of what was owed.

It's two separate pieces of legislation and enforcement systems. So under the law governing wages, they do have the right to deduct the money. The fact they don't do what they are supposed to do, doesn't change the fact that it is a lawful deduction. Without a payslip though, you can get compensation equal to the deductions (for a limited period).

From the HMRC side, it's all about the tax law, rather than employment. I'm no expert in this so can't comment in detail, but if you look at the doc I linked to, it looks like you can argue that your employer hasn't been acting in good faith so you aren't liable to pick up the tax bill. It may be worth framing any questions to HMRC around "what evidence will you accept to show this?" Doesn't solve the problem of the gap though. Its an absolute issue for the employee who is caught in the middle when and employer doesn't do what they should do.

Ah, I understand now, so essentially defrauding HMRC.

That's not good. Definitely criminal activity then.

OP, tell them that they must pay you your gross, since you are now apparently responsible for paying your own NI and income tax.