Company pocketing tax

[stuggling]

Work 60 hours a week at 6.31ph so total of 378.60, but basic pay is 195.61 and then expenses of 129.20 and paye of 2.80 and NI is 5.58 so missing tax of 15.5%

 

Worked it out by adding basic and expenses together 324.81 meaning 53.79 is missing so I'm assuming they pocketing it instead of paying tax, we don't get tax on expenses but they don't declare as overtime on p60 I've done everything possible to tell hard but they just go yeah we will chase it but nothing for 2 years, now our local council want break down of expenses so told them it overtime and they say but you not taxed on so get your company to tell us, compmay refuse to and now we lost all housing benefit

[honeybee13]

Hello stuggling.

 

I'm sorry, I don't follow all of what you say above. What kind of work do you do please?

 

And can you tell us what it says on your payslip? That might help us to work out why there is a discrepancy.

 

HB

[stuggling]

Security,

 

Slip says:

Basic pay. 195.61

Expenses. 129.50

 

 

Paye tax. 0.60

National insurance 5.10

 

 

Total gross pay. 325.11

Gross tax for tax. 195.61

Earnings for NI 195.00

[stuggling]

I work 60 hours a week making 378.60 but they never put that on slip. Expenses is part of income too!!

[honeybee13]

Thank you for the info.

 

I'm by no means a payroll type, but what you've quoted seems to say your gross pay before tax, is £325.11. I don't know why it's less than your £378.60.

 

From the payslip you quoted in post #3, how much did you receive after tax and deductions please?

 

HB

[stuggling]

319

 

It should be gross pay for tax at 378.60 with the 60 hours worked, but they put 195.61 as gross pay so that is all that is taxed, then they put 129.50 as expenses so not taxed on that, we worked out that they pocketing the reminder of our wages they should be paying to us to cover taxes, and that if ever investigated it us that will have to pay difference, we have never seen our official hours we have worked on wage slips for last 2 years but I have kept my time sheets to show, and we work 12 hour shifts but when on holiday only get paid for 8 hours, we do not take breaks as we the only guard on site so can't.

[izzitme101]

ok i think i can help here, how you are taxed under the paye system has changed.

basically, hmrc get you wage details at the same time as you now, so how it works is,

you can earn 10k per year before tax, divide this by 52, then you have a weekly figure that you earn before paying tax.

so if, for example, you can earn 180 pounds per week, before tax, and you only earn , say 100, there should be no tax deduction.

if you earn 200, you should only be deducted for the 20 pounds.

 

This means that at the end of each year, a lot less people are clamouring for tax refunds, but also makes it easier for you during the year, as you are not overpaying.

 

hopefully someone will clarify, im not an expert, but that is how i understand it to work now.

[stuggling]

It's not that, I work 60 hours at minimum wage so 60 x 6.31 is 378.60, but this does not show on wage slip.

 

According to wage slip I work less hours or don't get minimum wage, so I get 195.61 as basic pay and the rest as expenses but only taxed on basic paye, I'm still missing about 50 a week from wages, we worked out they pay 5% of our wages as tax then they pocket the rest but don't put it on wage slip, but if inland revenue take this up it will look as though Im aware that they shorting the wages and putting rest as expenses so better of and I'm forced to pay the rest of taxs

[steampowered]

I'm finding this a little difficult to follow. What exactly are they pocketing?

 

I'm very sceptical that they can count expenses towards the national minimum wage. I strongly suspect that would count as not getting the minimum wage. Have a chat to these guys and see about reporting them: https://www.gov.uk/pay-and-work-rights-helpline

 

Paying holidays on the basis of 8 hour shifts when you work 12 hour shifts is also not legal.

 

I don't understand why you would lie to the council? If anyone is going to get in trouble here it would be the employer. Just tell them the truth.

 

I also don't understand why you are losing housing benefit as a result of all this?

[stuggling]

instead of putting the full amount we earn in PAYE/basic pay they put 195.61 and 129 as expenses. this doesn't add up to the hours worked.

 

I suspect they pocketing the tax and only I'm only taxed on basic pay which is not a lot, spoke to HMRC and they said will look into it over a year ago, i made it clear to them that they paying us so we dont get taxed on expenses, but this is wages.

 

the company say the contract is 40 hours but i was tupe in august 2012, from a previous firm, that had a zero hour contract, we dont even get the double pay on bank holiday just time and half now. i would scan wage slip but lost my usb

[steampowered]

If you aren't being paid for the hours worked, then query that with them. You should be paid for the hours you have worked.

 

 

It sounds like there are a lot of dodgy employment practices going on here that would be exposed if this company is investigated or taken to an employment tribunal.

[stuggling]

ok i will sort it out on monday

[ericsbrother]

In simple terms they are fiddling the books to avoid paying NI contributions and this has the knock on effect of underdeclaring and underpaying your tax. You will have to pay it on self-assessment if HMRC demand it so get on to the tax office and clarify your position.

[stuggling]

ok will make an appointment for out tax office to sort tomorrow morning thank you for your help

can i sue my work as well as they been underpaying me the minimum wage

[honeybee13]

Hello again.

 

If your company have messed up your payslips and paying you less than the minimum wage, it might be better to report them to HMRC for the tax and NI part.

 

And you can report them for minimum wage issues here. Both are anonymous - do you really want to go to court?

 

https://www.gov.uk/pay-and-work-rights-helpline

 

HB

[stuggling]

No I don't want comp to know it is me

[steampowered]

In simple terms they are fiddling the books to avoid paying NI contributions and this has the knock on effect of underdeclaring and underpaying your tax. You will have to pay it on self-assessment if HMRC demand it so get on to the tax office and clarify your position.

 

Have a look at http://www.hmrc.gov.uk/thelibrary/tax-paye/emp-errors-deduct-paye.htm. It seems to say that the employee would not be liable if the employer did not take reasonable care to operate the PAYE system and the error was not made in good faith. I guess this should apply here.

can i sue my work as well as they been underpaying me the minimum wage

 

Yes, you can sue them for the whole whack.

 

Not paying minimum wage (I do not think they can count expenses towards this).

Not paying the correct amount of holiday pay (they have to use a rolling average of actual hours worked, they can't pay you for 8 hour days if you work 12 hour days).

Unfair dismissal if they dismiss you as a result of all this.

And given the attitude of this employer to legal compliance I'm sure we could add on some additional claims for things like failure to provide a statement of employment particulars.

 

If you want to take this employer to the cleaners then you we will help you on CAG, although the reality is that the employer would be likely to dismiss you if you sued them.

 

The part I don't understand is why (it sounds like) the employees have been lying to the council and saying they are overtime. This is extremely foolish (not least because the expenses clearly are not overtime if it is not being taxed).

[Emmzzi]

you can't sue them, and be anonymous, and in reality remain employed.

 

So you need to decide what this fight is worth to you, and if an anonymous tip off will get the same result. If you've been asking questions at work though, it will be obvious where the tip off came from.

[steampowered]

Just in regards to minimum wage compliance - see http://www.legislation.gov.uk/uksi/1999/584/regulation/31/made and http://www.legislation.gov.uk/uksi/1999/584/regulation/32/made.

 

Its quite clear that 'an allowance other than an allowance attributable to the performance of the worker in carrying out his work' and 'any deduction in respect of the worker’s expenditure in connection with his employment' cannot be counted towards the minimum wage.

 

Cutting through the legalese, they can't use expenses to count towards the minimum wage. If these are genuine expenses then you do not need to count them towards the minimum wage and can sue the employer for the shortfall, going back up to 6 years. If there are in fact no expenses and the 'expenses' classification is just straight up tax fraud then the legal position becomes less clear.

[stuggling]

though i would update, been to see tax people and showed them wage slip:

 

they said so you are paid a basic wage and expenses, we informed them that the expenses is overtime of which we are not taxed on, so they replied they can do this, but then we mentioned that they can not and explained about being underpaid. After getting to a supervisor, they going to look further into the matter as they understood what we ment and how things are paid.

they said it looks like you being paid as normal to your serlfs but instead of paying tax man the 20% tax they paying 5% and pocketing the rest of the tax but to us it looks normal, they were not happy and will take further we do not need to do anything else and was do anonymous as they will claim all underpayments of tax from them and not us. thank you

[steampowered]

Well done, a good result, hope it goes well.

 

Just out of interest who was it that you contacted? HMRC pay & rights at work hotline?

[stuggling]

Our local tax office , for dwp.

 

the hotline didn't understand.

[stuggling]

ok so HMRC still looking into it, but the holiday pay, i have spoken to the firm about and got a reply saying we contract you to 40 hours a week, so that is what you will get paid a week on holiday.

 

I mentioned that we were tuped over from another firm with a 0 hour contract and plus i work 60 hours a week, 12 hours a night, with no break. they replied due the nature we pay you on a weekly basis (the conning of tax man) it it works out better, I've made clear i would like all my money I'm owed for being underpaid from holidays to be repaid. Im sending out a letter as well, i know i will get sacked but they will find different thing to sack me over, e.g. attendance i took a bit of time off in december due to car problems.

 

Had a meeting over the car problems and was threatened and made to cry in front of other staff, and a letter thrown at me to sign to resign i did not and told them to do one. I later found out that the supervisor of the site takes random days off when he wants to sort his wedding to another member of staff who works on same site but he has had no warning over this and has attempted to get me to cover her shifts, of which i have refused i think this is what they will use to sack me or force me on to days after working 4 years of nights making it difficult for us and sacking me when i refuse to work days

[ericsbrother]

They wont want to sack you as they know that you will make things difficult for them if they do. They will try and browbeat you into accepting what they do as they want to set an example to all of the other people. If you go it will show that they dont have to be obeyed, even if it is by sacking you as that will become a focus of attention for both the staff involved and the other business partners/clients etc..