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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16514
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I started a new job in September last year at an

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I started a new job in September last year at an establishment and signed a contract stating I was employed full time and my contract states that they will make legal deductions (tax and NI) and this was happening. In December, the owners of the establishment changed but kept the staff on. We have not signed any new contracts. The new owners have been paying us but they have been paying us in total, as in they haven't been making deductions for tax and NI. So since December I haven't paid any tax. What is my legal standing with this issue? Should I contact HMRC and repay this tax myself?
Assistant: Which tax year is the deduction for?
Customer: 2018-2019
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: No, Thank you

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Customer: replied 4 months ago.
OK, Thank you

What do you do exactly? Is this your only job?

Customer: replied 4 months ago.
I am a chef, paid salary and this is my only job.

Do you work in a restaurant or a hotel or some other establishment?

Customer: replied 4 months ago.
A restaurant


Leave this with me while I draft my answer. It will take a while so please bear with me.

Customer: replied 4 months ago.
Owned by a company/group that owns other restaurants
Customer: replied 4 months ago.
No problem. Thank you

You should only register as self-employed if you feel you are genuinely self-employed. Given that you don't work for more than one "employer", you are an employee as far as I'm concerned. The people who are running the business are heading for trouble if this is how they operate.

You really only have three options.

1 Confront the company and ask why they are not operating PAYE. Clearly, they want to avoid employer national insurance contributions which are a high burden on employers. If you do confront them, you may be seen as a troublemaker. If the company wants to treat you and others as self-employed, they should at least tell you what to do as far as your tax situation is concerned.

2 Contact HMRC anonymously and tell them the situation. Avoid giving your name. Put aside the tax and NIC in case you and not your employer is forced to hand it over after a PAYE audit by HMRC.

3 Register as self-employed and hope that the situation doesn't come to light. The employer could get into trouble if they have not enrolled you into a pension plan or are not contributing to an existing one set up by the previous business owner.

4 Do nothing, (not a sensible option).

I'd be inclined to make the anonymous call to HMRC. However, such a move and the following PAYE audit may push the company to close the part of the business you work for.

I hope this helps but let me know if you have any further questions.

Customer: replied 4 months ago.
I've heard that they are now going to ensure they use the PAYE system as of this financial year and have already made deductions for this, yet to see a payslip. If this is true and they have now set it up. What will happen about the missing tax from last year?

That's interesting.

I think for now, I'd think I'd sit tight and put the tax and NIC aside in case you are asked to pay it back to your employer or HMRC. It may be that there are communications between your employer and HMRC that you are not aware of.

Customer: replied 4 months ago.
Ah, ok. If I do have to repay it, are there payment options?

Given the circumstances, I'm sure you could negotiate a payment plan with HMRC. HMRC really should go after the employer first.

Customer: replied 4 months ago.
OK. I'll sit tight and hope they either first ask my employer or accept a payment plan. Thank you for your help


Would you mind rating my answer before you leave the site please.

TonyTax and 2 other Tax Specialists are ready to help you
Customer: replied 4 months ago.
Of course


Customer: replied 4 months ago.
Hi Tony. We spoke yesterday about my employers paying full without making deductions. I spoke to my employer today who said I've been classed as self employed since they took over the restaurant, but quickly changed their tune when I quoted TUPE regulations and provided a copy of my employment contract. They have said they will speak with their account to ensure I'm classed as employed since they took over and find the best way to deal with it. I have made it very clear to them I will repay the owed tax and NI (around £1000) as a lump sum. How could they possibly make this work? What are the possible ways for this to be sorted as I refuse to be classed as self employed and paid it as I've been in receipt of working tax credits and have been very honest with HMRC in that respect about my income since I signed the original contract back in September last year. Many thanks in advance.
Customer: replied 4 months ago.
I refuse to be classed as self employed as I've been in receipt of working tax credits and have been very honest with HMRC in that respect about my income since I signed the original contract back in September last year. Many thanks in advance. (what the last paragraph should have been)

It will be up to your employer and their accountants to sort out the mess for 2018/19. You cannot get into trouble with the tax credit people as the situation is not of your making. In any event, your gross earnings are the same whether you have been employed or self-employed. You just haven't had tax or NIC deducted.

Customer: replied 4 months ago.
I see, that's good to know about tax credits, Thank you. Is this a quick fix with the accountant or am I likely to have a wait ahead of me before this is sorted? Thanks ever so much for your guidance.

I don't know what the accountant needs to do. If they have already submitted the Real Time Information year end PAYE figures for the people who were treated as employed then that will have to be amended t take account of you and others.


I'm just following up to find out if my answer helped or if you have any further questions. If not, would you mind rating my answer so that I get credited for my work.