Tax and NIC

Stevebrooke · 20/10/16

If a person is employed and on PAYE are the deductions on a wage slip enough for the individual to say to HMRC that the sums have been paid or would that person still be liable if the employer has not passed on the amounts to HMRC?

The question is asked on behalf of a relative who has recently been made unemployed due to a lack of sales in the retail business and is wondering whether or not the deductions from pay have been passed to HMRC.

T.C · 20/10/16

When I was made redundant a few years ago, I was on PAYE.

I received my P45 and it was assumed that I had paid all my tax and NIC. Couple of years later I got told that I had underpaid my income tax by over ?4,000

I contsted it on the grounds that I was on PAYE and that surely my previous employers should be the ones liable as it was then that got the amounts/paid the wrong amount every month or whenever, to be told that regardless it was a personal liability so get your cheque book out or else.

So I had to pay this underpayment off over a 3 year period.

So, I know it is a long winded answer, but I think like me, your realative will be liable should it transpire that there has been an underpayment, but he may not be advised or told for a few years.

Quiney · 20/10/16

Hmmm... thats not how I understand it from when I used to employ people.
The payslips and P60 are evidence that your employer has deducted your comtributions. From this the Revenus should them investigate the employer.

Also, http://adviceguidancefunding.blogs.lincoln.ac.uk/tax/

T.C · 20/10/16

Quiney said:
Hmmm... thats not how I understand it from when I used to employ people.
The payslips and P60 are evidence that your employer has deducted your comtributions. From this the Revenus should them investigate the employer.

Also, http://adviceguidancefunding.blogs.lincoln.ac.uk/tax/

I would agree, but unless the rules have changed, that is the situation I found myself in, and it was made quite clear that regardless of any mistakes made by the employer, strict liability meant it was down to me.

I asked them to double check that I had underpaid, but they were arrogant to the point of "We don't make mistakes" at which point \i did blow my top a bit and pointed out several mistakes they had made in the past which I could prove, including a couple of letters of apology.

Dealing with HMRC is very much a :bang: situation.

Maybe a proper accountant can qualify the situation for the OP. I am certainly no expert, I can only relate to the situation I found myself in and the fact that I had to pay over ?150 a month to HMRC for over 3 years,

slim63 · 20/10/16

I am currently having heated discussions with HMRC after receiving a letter stating my NI contributions are not up to date & therefore I will not be entitled to a full state pension even though that's a good few years away & probably wont exist by then h1d1ng2

I asked for dates when my contributions had not been paid thinking it could have been missed when I was self employed & it turns out it is from 2 short periods on unemployment 6 years ago :whi5tl:

HMRC don't seem to understand that while unemployed contributions are made on your behalf by the DHSS, in the words of the bitch on the phone "pay now or suffer later" at this point I became rather miffed & she put the phone down

lee j · 21/10/16

Quiney said:
Hmmm... thats not how I understand it from when I used to employ people.
The payslips and P60 are evidence that your employer has deducted your comtributions. From this the Revenus should them investigate the employer.

Also, http://adviceguidancefunding.blogs.lincoln.ac.uk/tax/

Surely that depends on a)whether the full amount deducted from your pay on PAYE (tax and NI) by your employer was paid to HMRC or b)whether the amount deducted by your employer was lower than the amounts that should have been deducted according to your tax code/received pay total. If a) then the employer is liable due to fraud/theft of money or if b)then you have underpaid and you are liable for the deficit. Unfortunately if there is a small deficit monthly amount it does accumulate over a few years.

Lee

noobie · 21/10/16

Would this not leave you having to pay the shortfall but then having to go through the small claims courts to reclaim from the previous employer for the return of those funds that they did not pass on and hmrc are now demanding?

JonP · 23/10/16

If the correct amount was deducted by the employer but not passed on to HMRC then I would have thought that would be fraud?
However, knowing this country, I suspect noobie is right and the onus would still be on the individual.

Quiney · 23/10/16

JonP said:
If the correct amount was deducted by the employer but not passed on to HMRC then I would have thought that would be fraud?
However, knowing this country, I suspect noobie is right and the onus would still be on the individual.

and the individuals evidence is their payslips and P60.

Jaws · 23/10/16

2 years ago one of my grandsons was made redundant when the firm he was working for went bust. ( linked to the building trade )
Fortuanely he had kept all the PAYE slips and rather than wait around went to HMRC himself with this exact question
They took all the evidence and then wrote a letter to him a few months later saying basically the firm had not passed on the deductions but because he had taken all the evidence straight to them they now knew who was liable and it was not him.
I would urge your relative to do the same sort of thing

Stevebrooke · 25/10/16

Thank you all for your input. All payslips have been kept and an approach to HMRC will be made at the end of the tax year to see what has been paid to them and what they have to say about it. If the deductions have not been passed on they will be provided with as much info as possible to pursue the employer and/or any individuals.

Judge Dredd · 26/10/16

Stevebrooke said:
Thank you all for your input. All payslips have been kept and an approach to HMRC will be made at the end of the tax year to see what has been paid to them and what they have to say about it. If the deductions have not been passed on they will be provided with as much info as possible to pursue the employer and/or any individuals.

Dont wait until the end of the tax year, do it now.

noobie · 26/10/16

HMRC are like a dose of the clap, unless you get it sorted as quick as, it will get you much worse the longer you leave it. Get in asap then at least it looks like you approached them as soon as you had a concern rather than it wasn't important enough to worry about.

Quiney · 26/10/16

Fully agree!

Lee337 · 27/10/16

From what I remember from my trainer days, if you are in PAYE employment and your employer deducts the correct amount of Tax/NIC from you but fails to pay it over to HMRC, the employer is liable (unless you are the employer as well, such as a Director, in which case there are certain rules whereby you can be made liable for deductions from your own pay. I can't remember the section of the Taxes Management Act off hand).

If your employer deducts too little Tax/NIC from your pay, you are liable.

For your own piece of mind (& proof of deductions) it's always prudent to keep copies of your payslips as evidence. While it's the employers responsibility to deduct and hand over Tax/NIC to HMRC each time an employee is paid, it's done on the employees behalf and ultimately it's the employees responsibility to ensure the correct deductions are made.

This is just my recollection of the rules & in no way suggests I know what I'm talking about :-0)

Tax and NIC

Stevebrooke

Knee up, wheel down

T.C

Registered User

Quiney

Registered User

T.C

Registered User

slim63

Never surrender

lee j

Registered User

noobie

Clueless in most things

JonP

Registered User

Quiney

Registered User

Jaws

Corporal CockUp

Stevebrooke

Knee up, wheel down

Judge Dredd

Been there, and had one

noobie

Clueless in most things

Quiney

Registered User

Lee337

Confused Poster