Please help - I don't want to be a benefits cheat! HMRC/employee issues

[DitaVonCheese]

Can anyone give me any advice about this please?

I've recently started working for a very small company - there are two partners, in the process of becoming a limited company - and me and that's it. We thought I was self-employed and just contracted to them but, after asking about this on the self-employed board, it turns out that I'm an employee in the eyes of the HMRC.

At the moment I only work 12-14 hours a week, max earnings of £98/week, though tbh would like to increase my hours as DD settles into preschool, though it probably isn't going to happen any time soon. I get paid in cash informally - I just keep track of the hours I've worked and ask for the money every few weeks or so.

The threshold for registering as an employer with HMRC is £97/week, going up to £102/week in April. So at the moment we would have to register for PAYE most but not all weeks Argh. If we do this then I will have to sort it out and just looking at the HMRC website is making my brain leak out of my ears, plus the company will have to keep all sorts of records/fill in forms etc. In short, I don't want to do it.

Theoretically it would be better for me to be registered as then I'd pay NICs and be eligible for sick pay, pension etc, but I can't get too worked up about that at the moment tbh.

My main concern is that DH and I get some tax credits - just working ones I think but haven't got the paperwork here. I haven't yet told them about my job because when I called to do it, they needed a PAYE number, which I don't have. I am panicking slightly at the fact I haven't told them and worrying whether I am currently committing benefit fraud.

I'm also pg with DC2 and due in July so this situation is only relatively short-term anyway.

I'm also confused about what we do if I drop an hour so that I earn less than the threshold - we wouldn't need to register as an employer with HMRC but presumably we'd still need to tell them that I was working? I can't see any information on what to do if you don't need to register.

If anyone can understand any of my above meandering waffle then I would be very grateful for any advice!

It's really your employers that should be putting you properly on the payroll and completing the paperwork. Start there rather than working casually cash-in-hand.

HMRC are very good if you're up front with them. If you give them as much information as you have to hand now and let them decide what you need to do next then you could avoid any nasty surprises in the future. £98/week would not attract any tax on your part, but if your employers are not paying the NI on your employment then you will lose out when it comes to pensions. HMRC may be able to get onto your employer

Same goes with HMRC and tax credits. You have told them you are working but haven't been able to get a PAYE numbers. So you've not withheld any information.

Thanks for the reply. I know that my employers should be doing it but essentially that means that I'm going to be the one who sets up a payroll etc as I do all the admin stuff, and I don't particularly want to go through all the headache of doing it for the sake of four months' worth of NICs. I'll try telling the tax credit people that I don't have a PAYE number and see what they say.

you either have to do the paye stuff or you have to register as self-employed.

if you register as self-employed and can fill the criteria for that then it should be ok.

but actually registering for paye might be easier.