Employer deducted tax but did not give to HMRC

[anniewarbux]

Hello,

Not certain if this is the correct forum to post in.

Previous employer has deducted tax and NI but has not handed over the money to HMRC (for year ending 2010).

Employer was a limited company and decided to fold in January 2010 when I was made redundant.

I didn't receive a P45 or P60 for that year.
I didn't receive my final months pay or redundancy money.

Took employer to court and won, but bailiffs (paid for by me) couldn't find him and so he didn't pay me either of these.
A charity paid one of these amounts for me.

I cannot afford to pay this unpaid tax, I already took a loan out because this employer did not deduct my student loan and HMRC have forced me to pay it all in one go.
The unpaid tax and NI is about £5'000.

HMRC say it's all my responsibility and I need to pay them and then take previous employer to court to get the money back, but as already proven, despite winning the court case, bailiffs cannot find him and I'll never get the money back.

I can't borrow any more money, I live paycheck to paycheck.

Can anyone advise me of an organisation who can help? Acas helped last time, but I feel as though I lost last time, I didn't receive any of my money!

 

[Mike tells it like it is]

Hello,

Not certain if this is the correct forum to post in.

Previous employer has deducted tax and NI but has not handed over the money to HMRC (for year ending 2010).

Employer was a limited company and decided to fold in January 2010 when I was made redundant.

I didn't receive a P45 or P60 for that year.
I didn't receive my final months pay or redundancy money.

Took employer to court and won, but bailiffs (paid for by me) couldn't find him and so he didn't pay me either of these.
A charity paid one of these amounts for me.

I cannot afford to pay this unpaid tax, I already took a loan out because this employer did not deduct my student loan and HMRC have forced me to pay it all in one go.
The unpaid tax and NI is about £5'000.

HMRC say it's all my responsibility and I need to pay them and then take previous employer to court to get the money back, but as already proven, despite winning the court case, bailiffs cannot find him and I'll never get the money back.

I can't borrow any more money, I live paycheck to paycheck.

Can anyone advise me of an organisation who can help? Acas helped last time, but I feel as though I lost last time, I didn't receive any of my money!

You see that is what's wrong with this country. HMRC should take you employer to court they can afford big lawyers. The arrogance of the UK tax office together with their incompetence is breathtaking.

Speak to CSA and a solicitor is the bets I can suggest I'm afraid.

 

[anniewarbux]

Thank you for your reply, and thank you for empathising!

 

[Truemanbrown]

Basically, the position seems to be this:-

• If your ex-employer hasn't paid over the tax and NIC, BUT has given you payslips which show the tax and NIC deductions, HMRC will usually go after the employer instead. If this is the case then appeal to HMRC and send them the payslips along with the appeal; or

• You do not have any payslips and, therefore, cannot prove that you ex-employers have had tax and NIC deducted from your salary, then it is quite likely HMRC would go after you if they cannot go after the employer (i.e. they went bust or disappeared), or if there is doubt as to employment status.

 

[David Griffiths]

Did you have payslips from the employer showing that the tax was deducted? That would be a good start.

If that is the case, then the fact that the employer didn't pay it over to HMRC is their problem not yours. You have actually paid the tax, and they cannot pursue you for it.

If you don't have payslips, do you have a P60 for the previous tax year? Again, that will show that the employer was deducting tax, and again it shouldn't be your problem.

 

[Business News]

PAYE is a tax collected by the employer on labour and if the employer doesn't hand those over the employee gets no credit for NI, no amount of demonstrating how unfair things are will change that. The HMRC could even regard the net earnings as gross earnings for tax purposes if they so chose to.

There is no call for the company to be held liable for unpaid taxes if it has been wound up. The government does provide compensation for unpaid wages up to £400/week for employees of companies that have folded. It is probably time limited on how long in the past you can apply but its worth your while having a look into it.

 

[decworld]

How can you know your employer did not pay it.

If they have given you P60/P45 then they declared it to hmrc.

You have no mechanism to find out what if anything they paid.

PAYE to HMRC is job lot until the employer sendsend of year, so untangling its not possible.

 

[David Griffiths]

PAYE is a tax collected by the employer on labour and if the employer doesn't hand those over the employee gets no credit for NI, no amount of demonstrating how unfair things are will change that. The HMRC could even regard the net earnings as gross earnings for tax purposes if they so chose to.

There is no call for the company to be held liable for unpaid taxes if it has been wound up. The government does provide compensation for unpaid wages up to £400/week for employees of companies that have folded. It is probably time limited on how long in the past you can apply but its worth your while having a look into it.

That's simply not correct. It is the employer's responsibility to deduct the taxes, not the employee's.

 

[Alison Jones]

A job I had in 2003 I paid all my taxes and NI, had the payslips to proove it. Knew at the time that my employer was swearing at the Tax Office staff who visited office and they just left empty handed. Must have been 4 years ago that I received letter saying I had not paid tax or NI for this period. Being OCD'ish about paperwork I had all the payslips in a folder in my parents loft so sent tax office photocopies and then got a letter saying that I did not owe anything for that year and that they would be contacting my previous employer.

If you got payslips that proove you paid tax and NI send copies to the Tax Office as you should not be liable. If your ex employer nowhere to be found that is the Tax Office problem not yours.

 

[Business News]

That's simply not correct. It is the employer's responsibility to deduct the taxes, not the employee's.

Eh? Not certain you read my post as intended or maybe I'm just being thick.

 

[Tom McClelland]

This doesn't quite make sense. If you're employed then PAYE/NI is the employer's responsibility, not yours. As long as they were giving you payslips showing the deductions that should be the end of the matter as far as you are concerned. Even if they weren't giving you payslips if the relationship was clearly employment then I think HMRC would struggle to get any comeback against you.

Are HMRC trying to claim that you were a subcontractor not an employee? That would be quite unusual as in most cases you'll find HMRC quite insistent that workers are employees unless the engagement meets stringent criteria. They can't (and they don't even try to in general) have it both ways.

 

[Spongebob]

Employer was a limited company and decided to fold in January 2010 when I was made redundant.



Took employer to court and won

I would have thought that the documentation from these two episodes was enough to prove that you were an employee of the company.

Has a liquidator been appointed to deal with the company's affairs? If so he should sort things out for you as you are a creditor of the company.

I have never heard of HMRC chasing an employee for the PAYE and NI deducted by an employer but not paid over to them. The law is quite simple; it is the employer who owes this money to HMRC, not the employee. The fact that the employer has gone bust is irrelevant.

Just what documentation do you have from your period of employment? Payslips etc?

Clearly it was sufficient to convince the court (industrial tribunal?)

 

[Jenni384]

It sounds to me like HMRC are trying to meet collection targets any way possible, even if it's not correct.

As others have said, the responsibility lies with the employer and it is absolutely not the employee's responsibility, and HMRC know this. I'd tell them in no uncertain terms that you know it's not your responsibility.

Get your MP involved if you have to.

 

[captaincloser]

Slightly off topic but I keep reading on here about people and companies disappearing. How hard does anyone try to actually find these absconders and surely local people can be asked and if you work for someone you surely know where they live ? I may be wrong but think it is probably quite difficult for most people to do a complete monlight flit these days ? If I were the OP I would hunt down this 'employer' and hope that is still possible

 

[Tom McClelland]

Slightly off topic but I keep reading on here about people and companies disappearing. How hard does anyone try to actually find these absconders and surely local people can be asked and if you work for someone you surely know where they live ? I may be wrong but think it is probably quite difficult for most people to do a complete monlight flit these days ? If I were the OP I would hunt down this 'employer' and hope that is still possible

The difficulty is that it is likely that the employer was a limited company which is now bust. In that case there is little serious chance of any comeback against the directors, since fraud would have to be proven well after the event. Being the director of a firm that goes bust and is unable to pay its debts isn't a crime.

 

[Alan R Price]

In over 30 years of dealing with company insolvencies, I have never heard of HMRC pursuing an employee who wasn't a director for tax which had been deducted at source and not accounted for. I don't believe they have any right to although I couldn't quote chapter and verse.

Furthermore, my understanding is that if the employer has nominally deducted tax and NI HMRC should give credit for both of these.

Jenni384 said get your MP involved. I agree. Tell HMRC to back off or the next letter will be to your MP.