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Best course of action

Client asks me to run payroll every week and I email payslips etc to her. She has never provided log in details for filing returns or given me a PAYE reference number, and for year end I printed off P60's etc.  I've always suspected she might not be registered for PAYE and now I'm certain she isn't.

What would you advise I do? I obviously don't want to jump the gun if she has registered but it's my opinion that all deductions have been pocketed.

Thanks in advance

Susie

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By occca
12th Aug 2011 18:37

Why are you doing payroll?
If you don't have the paye ref?

How did you do year end?

I'd be telling her I need the ref before I could run any more payslips

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13th Aug 2011 16:36

shady client/bookkeeping

either ask for a contact from your client and state exactly your understanding that you are just the payroll clerk/bookkeeper

 

or else if you want to do a professional job tell the client of the risks he has exposed you to and himself and consider your money laundering reporting obligations....

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13th Aug 2011 09:36

Know your limitations

As occca said, you shouldn't have been running a payroll without the PAYE reference. The P60s you have printed are invalid without it for a start.

It is important that we know our limitations and turn down client work when it is outside our knowledge. The fact that you carried on doing this work without this most basic of information raises concerns for me that there are other things you might have done wrong. There is no shame in telling a client you can't deal with a particular aspect. Unless you are able to employe specialist staff, you can't be expected to know everything.

As things stand, you have a serious problem. You suspected that the client was evading their responsibilities to be registered for PAYE. Despite that, you prepared payslips and P60s on their behalf. If they have evaded PAYE then you have effectively made yourself an accessory to that crime. This is not a good position for a professional to be in.

I presume you are also doing her accounts so have you seen the PAYE being paid over to HMRC? If not then things are looking really bad for you, as you not only suspected evasion but actually had evidence of it. In this case you probably want to speak to your professional body's legal support line (or a solicitor if you are unqualified) about your exposure. A report to SOCA is also advised, as failing to remit PAYE due is undoubtedly a money laundering offence.

Of course, she she may have a reference in which case you may be in the clear. I would insist on having it before doing any more payroll work, though I still have reservations about your continuing with the work as noted above.

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By Teknik
14th Aug 2011 19:14

Thank you for your advice

I haven't been doing the accounts, I believe she uses a bookkeeper for that. I merely run the payroll, email payslips, and for year end posted all the print outs she would need.

As you advise I will tell her I'm unable to continue unless she provides the PAYE reference. I will also voice my concerns to SOCA whether she supplies the reference number or not.

Thank you both again for your advice.

Susie

 

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15th Aug 2011 10:23

The PAYE reference

... is not a "get out of jail free" card.

Although I think that some of the comments have been rather harsh, you do seem to have been operating with responsibilities split between the client and the payroll operator in an unusual way.  Whatever else, you should have had a letter of engagement - a contract - setting out exactly the respective responsibilities of the client and yourself.  If that is in place and you have fulfilled your responsibilities, you could continue to act.

What concerns me is how the client could have filed her 2010/11 forms P35 & P14 online, as every employer is required to do, from print outs provided by you.  It seems unlikely that someone who has sub-contracted the payroll processing to another person would have the skills to file the end of year returns online herself.

Even if she gives you a PAYE scheme number, you would still have your suspicions that she has not filed the returns or paid over the PAYE deducted and so, I agree that you need to file a report with SOCA.

 

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By stratty
17th Aug 2011 10:52

PAYE Registration

You could always register the business for PAYE on behalf of the client.

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17th Aug 2011 13:08

A number of different solutions

Personally I would chat this over with David Winch, as in this situation it will be most cost effective to ask an expert in MLR and he can help you weigh up what you have in evidence and your legal position.

If not, then I am slightly curious that you have crafted a letter of engagement that exhonerates you from giving any advice on this, particularly regarding the new regimes for tax penalties, late payment and online filing etc. I can't imagine that HMRC will be overly impressed with you as an agent.

Sorry to be harsh.

Virtual tax support for accountants: www.rossmartin.co.uk

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