Boss didn't pay employee PAYE?

[minion]

Hello,

The company my brother works for has gone bust. He has been getting full payslips for the last 6 months but has discovered that his boss was not paying the PAYE tax and the employers PAYE tax to HMRC.

Is he liable for this now or will it effect him in anyway?

I assumed that it is the emoplyer who is in bother but thought id best check for him.

Thanks

 

[Tom McClelland]

Hello,

The company my brother works for has gone bust. He has been getting full payslips for the last 6 months but has discovered that his boss was not paying the PAYE tax and the employers PAYE tax to HMRC.

Is he liable for this now or will it effect him in anyway?

I assumed that it is the emoplyer who is in bother but thought id best check for him.

Thanks

I doubt that your brother will be affected at all.

Assuming that the employer was a limited company, and that they've simply gone bust, having tried to trade through difficulties then probably his boss isn't in any trouble either.

 

[minion]

Thanks,

I dont know the in's and outs of it but appreciate your help.

Cheers

 

[MrCloser]

If the company goes into receivership I believe the Inland Revenue is a 'preferential creditor' and gets first dibbs on any of the proceeds.

Not sure where this leaves your Brother legally, but he should really check that his national insurance contributions will be/have been paid as this could affect his stae pension in later life

 

[Tom McClelland]

Not sure where this leaves your Brother legally, but he should really check that his national insurance contributions will be/have been paid as this could affect his stae pension in later life

As far as I am aware that is false. HMRC doesn't hold failure of an employer to pass on contributions against employees. He should get full credit for the contributions regardless (assuming that the company correctly files its P35/P14 returns as it closes down)

 

[QuickHomeBuyers]

I think the liability of the debt lies in with the debtor. So I would be very surprised if it affects your brother. Provided they declared their debt by filing the documents.

 

[Spongebob]

If your brother has payslips showing the deductions of PAYE and NI then he is fine; his account with HMRC will be credited even though the employer never paid over the money. He should check with the liquidator however, that all wages records are in order.

If the company goes into receivership I believe the Inland Revenue is a 'preferential creditor' and gets first dibbs on any of the proceeds.

Not true. HMRC is no longer a preferential creditor. For some reason known only to itself the last government removed its own preferential status!

 

[KateCB]

Not true. HMRC is no longer a preferential creditor. For some reason known only to itself the last government removed its own preferential status!

Hahah, talk about the left hand not knowing what the right hand is doing!

 

[Alan R Price]

Not true. HMRC is no longer a preferential creditor. For some reason known only to itself the last government removed its own preferential status!

It was to do with the "rescue culture" - to try to discourage HMRC from petitioning and encourage it to support CVAs and other turnarounds. HMRC does also have the weapon of distraint in its armoury which it tends to use nowadays if it thinks debtors are "playing the game".