Need advice on income tax please

[Imnotaslimjim]

Found out yesterday that DH's boss (been with him 6 months) hasn't paid any tax or NI for him. Technically he's been getting paid cash in hand. I've been asking for wage slips so I can get tax credits sorted and get told its being dealt with

I've been claiming tax credits as his wages for the new job were the same as the old job so we just never changed the job details

Now, I don't know what to do. Are we in major trouble? Is it fraud to be claiming TC, even if I didn't know he wasn't paying tax?

Where do I go with this now?

No you are not in trouble, paying tax and NI is the employer's responsibility.

If the amount he has been receiving hasn't changed then your position with tax credits shouldn't change.

You can report your DH's employer to HMRC, but don't expect that to make your DH very popular if the employer can work out it's him. You can report on-line or by telephone using the details here.

Thanks for the advice anchovy

One query though, I thought you needed to be paying income tax to be entitled to tax credit? AFAIK, DH isn't declared as working, but does that matter as long as the figures are right at the end of March?

He might have to pay the tax bill himself, even if he'd received payslips suggesting deductions for tax. As he'd been getting cash in hand, he'll owe any tax due.

He won't qualify for WTC if his job isn't official.

I feel very uncomfortable giving any advice on this. This is part of the reason why the government deficit is so large. People should not be allowed to get away with thinking that somehow they shouldn't be paying their taxes, and it's OK to work in the black economy. Morally it's indefensible.

I understand that Resolution and so does OH. I queried it cos the amount he is being paid is such a staight amount rather than pounds and pence IYSWIM

DH didn't know that there wasn't tax being paid, as I said we have asked for payslips cos he's never received one, and get fobbed off with "its being dealt with"

I'd already figured that the tax bill will be his to pay as there is no allusion that there has been tax paid. DH isn't one for confrontation though so won't talk to boss about it.

I didn't think we qualified for WTC as officially he isn't working, so now I'm trying to figure out how much bother we are going to be in if its not sorted for April. I've worked out the tax bill is about £1500, and WTC have paid us about the same for the same period so they'll want that back if it isn't sorted won't they?

I am so stressed out about this I feel sick, and DH doesn't seem to care we need to get it sorted out before the end of the month so the figures are right, but lord knows where we are supposed to get that sort of money from. Right now I feel like throttling his boss

That is not correct Resolution. There is no such thing as an 'official' job - if you are employed then it is the employer's responsibility to deduct tax and NI from any payments made to you. Deliberately evading that responsibility is fraud.

But if your husband has conspired in that fraud (by agreeing to work cash in hand) then of course you are in trouble. In this situation, the Working Tax Credit claim could itself be considered fraudulent.

You need to be clear about the difference between "DH's boss hasn't paid any tax or NI for him" and agreeing to work cash in hand :(

He didn't agree to the cash in hand, that much I'm certain on. But I always thought that ignorance wasn't an excuse when it come to tax and other HMRC stuff. OBviously I don't know much about it, or I wouldn't be here

So if he didn't know, even if all the pointers were there (I figured something fishy was going on but didn't know what) does that mean we might not be liable, even if DH has been paid what technically should have been paid to the tax man?

Think I'm going to have to sit DH down and explain, in black and white, the full consequences of the situation and find out exactly how much he knew, and how long he's known for

what do you mean by 'he isn't officially working'?

are you working? If so you should still get wtc

and no you dont need to be paying tax to get tax credits, even though the name implies otherwise

What I mean is I don't think he is on his boss's books. How can he be if the boss is paying cash. Yes, he goes out every day, 8.30-5.30 and works but it will be classed as a backhander job as far as the tax man is concerned surely?

No, I don't work, there isn't much round here atm, so I'm currently a SAHM with our 2 DC

His boss has now admitted to paying him cash for the last 6 months and that no tax or NI has been paid.

And the tax credits, I know you are entitled to something if you aren't working, but not as much as when you are. So if he isn't on the books, we have no income to declare, so what we have been paid TC wise since he started working for this boss will be classed as an overpayment surely as we won't have been entitled to it

If his income hasn't been declared on the tax credit application then that is fraud. If his income was declared, then that's fine as far as tax credits are concerned.

You'll have to work out whether he earns enough to pay tax over the whole current tax year. You say £1500 is owed. If that's true, then he might owe the tax as much as the employer.

See this

www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10010537

Might be worthwhile him ringing the tax evasion hotline.

How much did he think he was getting paid? Was it obvious that no tax was being deducted?

Resolution and Reality, thank you, you are both being a great help and putting my mind at rest a little

We haven't declared this income to Tax Credits yet as it doesn't need declaring til the renewal

DH says he wasn't aware that he wasn't paying tax, and that it wasn't obvious, but now I've seen his bank statements for the last few months its very obvious to me. I don't see how you would get paid such a straight figure every month (and the same figure) so he queried it and got told he isn't on the books yet.

He was working before he took this job, moved straight from there to this one. With annual leave he had to take he had a week off between them but was paid until the day before he started the new job. The wages are the same, but much better environment, chance to forward himself and closer to home, so he took a chance. I'm starting to wish he hadn't

I'm going to talk to him tonight about it, and tell him he has to get his boss to sort it by the end of this month.

He has earned enough in the year to have to pay tax, just don't know how we're going to pay it!

Does he have a letter of offer saying how much he'll be paid?

Sorry, forgive me for being dim but how? He isn't deducting anything. They agreed on 18k a year and he is getting £1500 a month, so he isn't taking anything is he? I think what you said earlier about declaring it as self-employed would be the best way, then figuring out how to pay the tax already owed.

The really tough part is he is really happy in the job, he is a completely different person since starting it. And there really isn't much round here atm, especially for him. He had to stay in a job he hated for 3 years before this one came along :(

I just wish I understood it all a bit better, so I knew what to do about it all

sorry resolution, x-posted

I don't think he has. And I don't think he's signed a contract yet either. When he got the job it all happened very quickly. He was offered the job, gave in his notice and started the new job in less than 5 weeks

I've been really naive haven't I?

Because we have seperate finances and I don't make a habit of checking his bank statements. He pays the blls and I buy the food and anything needed after that is bought by whoever has money left. It was only becuase he hadn't put this months away yet and I saw the amount he had been paid and queried it (who gets paid dead on £1500 after have tax deducted?) Then looked back over the last 6 months and saw the same amount so made him question it.

I've spoken to him on the phone and he said he has spoken to the accountant, and its being sorted and he'll tell me more when he gets in. I just hope he knows what hes doing

Thats what I'm thinking Reality. How could he not have done? Nobody gets such a perfect amount as tax is pounds and pence taken out. Still very annoyed with him, but will see what he says when he gets in. Apparently the accountant is "sorting it"

Thank you both for your advice today, I'm feeling a lot better about it now. At least I know it can be sorted easily