Paid Late & Short With No Written Contract Of Employment

[JimSonWeed]

I’m hoping someone here can help; I’m at my wits end with this…

 

Some nine months ago, after making an informal verbal agreement to level of wages and hours of work, I accepted an offer of employment with a small company where I am (apparently) the only PAYE employee. I was pretty desperate at the time as I had been unemployed previously.

 

Anyway, it soon transpired after the first full month that I was paid late, and when I was eventually paid, I was paid partially in cash and rest in the form of a cheque, written on an ad-hoc basis which promptly bounced; however, my employer seemed extremely apologetic at the time, assuring me this was because the company was experiencing a few teething problems. Eventually, after much incurred stress to myself, my inaugural month’s pay was honoured, albeit completed out of sync with the wage slip that was also issued on an ad-hoc basis.

 

Now, as the months have passed, I face a constant losing battle to get paid on time, in full as agreed verbally after my acceptance of the job; incurring bank charges all the way and wrecking my credit status due to this. Every month I invariably get fobbed off with ‘due to cash flow problems…” During this time, of course, I have reminded my employer that I require a written contract of employment, which I believe I am legally entitled to after three months, but this is not forthcoming. What’s more, due to the ad-hoc way they seem to be issuing my payslips, I don’t believe that they’re paying my income tax or NI correctly, if at all.

 

I’d walk out of there tomorrow, if it wasn’t for the fact that they’re constantly in debt to me and I’m afraid they might play the ‘limited liability card’ on me; and also without a written contract of employment I’m not sure, legally where I stand.

[patdavies]

The first and immediate action for you is to contact HMRC and see if tax and NI is being paid.

 

You are personally liable for this. Don't leave it to build up as you may end up with a bill that will bankrupt you.

 

You can produce all the payslips in the world showing employer deductions, but it is you they will come after for the money.

[JimSonWeed]

:o Great, it gets better. So not only do I have to deal with my credit status being trashed and my bank ringing my D/Ds, costing me in charges and anxiety, through no fault of my own; but I may have HMRC to deal with too through being the unwitting victim of a boss that likes to fly a company by the seat of it's pants.

 

I thought that there may be some legal recourse here to recover monies owed through breach of contract. At the time I accepted the job I was even assured of an increase in renumeration after I had attained two professional exams which I have since passed.

 

Great; I should have stayed on the rock & roll .

[GlasweJen]

Jim, you aren't actually entitled to a written contract, what you want is a "particulars of employment", they're similar but not the same. If you work in the same role with the same conditions for a while then it's an implied contract.

If you call HMRC and say that you're in work and want to check your tax is coming off they will be able to sort it and possibly fine the company for being so lax.

Also call ACAS, you're entitled to be paid at regular intervals, not when your boss decides to get his finger out his bum!

[Goldlady]

I don't agree that you will be personally liable for tax/nic if you have payslips to prove that the employer took them off you.

 

My brother worked for a dodgy operation many years ago now and when it folded he tried to claim dole. Initially they said as no tax and ni had been paid by the employer he was not entitled but when he produced the payslips showing that the money had indeed been deducted from his wages they accepted that as evidence. The tax/nic was later added to his record.

 

So keep those payslips - even if you haven't had the money.

 

As a small business owner myself I have had similar problems finding people's wages from time to time. In my case it has genuinely been due to cashflow problems - big people not paying when they bloody well should. I have always managed to pay people within a day or so, and on the other side of the coin I have given them money in advance where possible if they have a crisis. We owe money for the PAYE and NIC - we pay the arrears off monthly - and I am sick to death of having some sanctimonious IR salaried employee telling me that we have taken the money off the employee therefore we should hand it over. Er Hello - we have just managed to scrape the money together to pay the person their wages. And if we were paid all the money we are owed at this point in time we would not be in this situation. And forget charging interest for late payment - nobody takes any notice of it.

 

Sorry - rant over. I am not siding with your employer at all - people need money to live and I have very often ended up with no money for myself but made sure that the staff are paid. After all if you haven't got the staff you haven't got a business.

 

As you rightly say, if you leave and try to sue they could well pull the limited company card. If it was me I would put them under some pressure to pay you what they owe before you walk out.

 

Also, if they do go under you can claim your outstanding wages and notice pay etc from the DTI. I believe they have to go into formal liquidation for this to kick in, but it does work.

[Weird Al Yankovic]

I don't agree that you will be personally liable for tax/nic if you have payslips to prove that the employer took them off you.

 

My brother worked for a dodgy operation many years ago now and when it folded he tried to claim dole. Initially they said as no tax and ni had been paid by the employer he was not entitled but when he produced the payslips showing that the money had indeed been deducted from his wages they accepted that as evidence. The tax/nic was later added to his record.

 

So keep those payslips - even if you haven't had the money.

 

As a small business owner myself I have had similar problems finding people's wages from time to time. In my case it has genuinely been due to cashflow problems - big people not paying when they bloody well should. I have always managed to pay people within a day or so, and on the other side of the coin I have given them money in advance where possible if they have a crisis. We owe money for the PAYE and NIC - we pay the arrears off monthly - and I am sick to death of having some sanctimonious IR salaried employee telling me that we have taken the money off the employee therefore we should hand it over. Er Hello - we have just managed to scrape the money together to pay the person their wages. And if we were paid all the money we are owed at this point in time we would not be in this situation. And forget charging interest for late payment - nobody takes any notice of it.

 

Sorry - rant over. I am not siding with your employer at all - people need money to live and I have very often ended up with no money for myself but made sure that the staff are paid. After all if you haven't got the staff you haven't got a business.

 

As you rightly say, if you leave and try to sue they could well pull the limited company card. If it was me I would put them under some pressure to pay you what they owe before you walk out.

 

Also, if they do go under you can claim your outstanding wages and notice pay etc from the DTI. I believe they have to go into formal liquidation for this to kick in, but it does work.

 

Unbelievable.

 

You employ people so you should bloomin' well pay them-and on time!

 

'In a day or so' is not good enough. It is your responsibility to get your creditor's to pay you on time and not your employees.

 

You are taking tax and NIC off them yet owe the Rev!

 

I'm gobsmacked.

[Weird Al Yankovic]

During this time, of course, I have reminded my employer that I require a written contract of employment, which I believe I am legally entitled to after three months, but this is not forthcoming.

 

Whoever told you that you are entitled to this is talking rubbish. Unless it was your employer and you can prove it.

[Weird Al Yankovic]

The first and immediate action for you is to contact HMRC and see if tax and NI is being paid.

 

You are personally liable for this. Don't leave it to build up as you may end up with a bill that will bankrupt you.

 

You can produce all the payslips in the world showing employer deductions, but it is you they will come after for the money.

 

Complete bunk.

 

The OP is PAYE and has payslips.

 

It is not the OP who is depriving the Revenue of cash-it is his employers.

[Goldlady]

Unbelievable.

 

You employ people so you should bloomin' well pay them-and on time!

 

'In a day or so' is not good enough. It is your responsibility to get your creditor's to pay you on time and not your employees.

 

You are taking tax and NIC off them yet owe the Rev!

 

I'm gobsmacked.

 

So have you got experience of running a small business for the past 15 years in this country, keeping people in jobs and off the dole statistics in this current economic climate in order to make such judgements? I suspect not.

[GlasweJen]

Isn't actually unlawful to not pay on time? I thought it would be a breach of employment rights act and of the contract because every employee expects to get paid on time? Also lack of funds leads to bank charges and financial hardship for employees?

[Weird Al Yankovic]

Isn't actually unlawful to not pay on time? I thought it would be a breach of employment rights act and of the contract because every employee expects to get paid on time? Also lack of funds leads to bank charges and financial hardship for employees?

 

Completely correct Jen.

 

If this country worked on the basis of being paid 'in a day or so' there would be riots.

 

The employer needs to state a pay day and stick to it. It's the law.

[Weird Al Yankovic]

So have you got experience of running a small business for the past 15 years in this country, keeping people in jobs and off the dole statistics in this current economic climate in order to make such judgements? I suspect not.

 

No, not for that amount of time actually.

 

But I have been on the receiving end of employer's attitudes like yours and have had one ET upheld on similar grounds with another pending which I'm sure I will win.

 

You can't treat people like you do. You cost the economy and not help it!

[cal37]

You have the right to be paid on time and any bank charges that you have incurred because of late payment, your employer have to cover.

You have the right to written particulars of employment within 2 months and as the term "employment contract" is in common usage it’s accepted in law to mean particulars of employment.

So if your employer refuses your request for a copy of your employment contract on the grounds that you never asked for written particulars of employment he will fail!!

I believe HMRC have dealt with this sort of thing many times and would be very helpful Contact them ASAP.

Do not just walk out, put your concerns in writing, make a copy and make sure your boss signs for the letter. In it say your are raising a formal grievance and wish for a meeting to discuss it.

[cal37]

No, not for that amount of time actually.

 

But I have been on the receiving end of employer's attitudes like yours and have had one ET upheld on similar grounds with another pending which I'm sure I will win.

 

You can't treat people like you do. You cost the economy and not help it!

 

 

Totally agree with you on this, if a company can not pay their workforce on time then they should not employ anyone. Why should an employee help a company out in its cash flow problems, the employees have their own problems and not paying them on time increases them.

[Goldlady]

I meant like £10 short on weekly wages which they would get the following Monday or Tuesday - not that they didn't get paid at all. :o I am certainly not trying to defend the people who are messing JimSonWeed (great name) about as this is not on at all.

 

Have you complained about this to them Jim - perhaps you could put something in writing asking for the outstanding money.

[patdavies]

Complete bunk.

 

The OP is PAYE and has payslips.

 

It is not the OP who is depriving the Revenue of cash-it is his employers.

 

At the risk of starting another war of words with someone who only views the world as he feels it should be...

 

The individual taxpayer is responsible for the payment of income tax and NI. An employee taxed via PAYE is, in effect, appointing his/her employer as his/her tax agent. The employer has no way of knowing all of an individual's taxable income.

 

If the employer wrongly deducts tax, the employee remains liable to HMRC to resolve the difference. I have to complete a self-assessment form every year, even though on PAYE. I am responsible for any shortfall of tax paid. Likewise, any overpayment comes to me, not my employer.

 

As for NI, if it is not paid, then the individual will have to make up the shortfall and the lack of contributions will trigger a letter from HMRC to inform him/her that unless he/she makes up the payments then the year in question will not count for determination of any benefits - including state pension. This, BTW, is why you should continue to sign on when unemployed, even though not entitled to benefit. When you sign on, your NI is deemed paid by the state.

 

Having payslips is meaningless - I could print my own. HMRC always go after the soft target.

 

If the employer is deducting tax/NI and not paying it to HMRC, then this would trigger action by HMRC and also possibly the Police - but the individual remains liable for the tax/NI until either paid or written off by HMRC (which is what usually happens, ultimately, in cases like this where it can be shown to be 100% the fraudulent activities of the employer).

 

I am not prepared to waste more of my life dealing with nonsense and personal attacks from Weird Al, so this will be my final post on this thread

[cal37]

It’s true that the individual is reasonable for his/her tax and the tax is recoverable from the individual not the employer.

A very dear friend of mine found himself in this situation and HMRC made it clear that he is responsible; however they were very understanding and in fact perused the employer in the first case not the employee.

They made clear that; if the employer fails to pay then the employee has to make up the short fall.

[Weird Al Yankovic]

At the risk of starting another war of words with someone who only views the world as he feels it should be...

 

The individual taxpayer is responsible for the payment of income tax and NI. An employee taxed via PAYE is, in effect, appointing his/her employer as his/her tax agent. The employer has no way of knowing all of an individual's taxable income.

 

If the employer wrongly deducts tax, the employee remains liable to HMRC to resolve the difference. I have to complete a self-assessment form every year, even though on PAYE. I am responsible for any shortfall of tax paid. Likewise, any overpayment comes to me, not my employer.

 

As for NI, if it is not paid, then the individual will have to make up the shortfall and the lack of contributions will trigger a letter from HMRC to inform him/her that unless he/she makes up the payments then the year in question will not count for determination of any benefits - including state pension. This, BTW, is why you should continue to sign on when unemployed, even though not entitled to benefit. When you sign on, your NI is deemed paid by the state.

 

Having payslips is meaningless - I could print my own. HMRC always go after the soft target.

 

If the employer is deducting tax/NI and not paying it to HMRC, then this would trigger action by HMRC and also possibly the Police - but the individual remains liable for the tax/NI until either paid or written off by HMRC (which is what usually happens, ultimately, in cases like this where it can be shown to be 100% the fraudulent activities of the employer).

 

I am not prepared to waste more of my life dealing with nonsense and personal attacks from Weird Al, so this will be my final post on this thread

 

Paying late contributions

 

 

 

If you did not pay contributions when you were liable to do so, you can be required to pay them late, and may also face a penalty or prosecution. If you were an employee, it is your employer’s responsibility to deduct contributions and pay them to HMRC, but if you were involved with your employer in avoiding payment, you can be prosecuted.

 

 

1 Clearly the OP is concerned that his employer has not paid his tax or NI correctly.

 

The HMRC would investigate on the basis that it was the employer's responsibility to do so.

 

If there is an honest mistake then the employer would have put the employee in it financially. If it was more sinister then the employer, not the employee, would be prosecuted for defrauding both the Rev and the employee.

 

2 If the employee has only the one employer then of course the employer will know all his employee's income because he/she will be paying it. And it is from the earnt income that the OP has a problem with.

 

(Obviously if the employee had another income, say from as a landlord, then the employee would need to declare this)

 

3 Wageslips are not meaningless because it is the law that they have to be provided, and itemised, for the employee.

[JimSonWeed]

Thanks for all your helpful replies. I think in the next instance I'll get onto the CAB for further advice. It's a week until Christmas now and I am still yet to be paid for November (not to mention bank charges, etc). Effectively these crooks have wrecked my Christmas. I will keep you informed of my progress. Cheers