Can they refuse to pay my client on this basis?

Can they refuse to pay my client on this basis?

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Good afternoon wise ones!

One of my clients, self employed hairdresser, carried out some work (on a self employed basis - as agreed) for a salon. Initially the Salon owner offered my client numerous contracts to sign, all of which appeared very much like employment contracts. My client didn't sign them, had a chat with the Salon owner and it was agreed that she didn't need to and would invoice the Salon owner for the work she carried out.

After 3 weeks my client became wary of the owner and her practices (the salon owner is Nigerian and had many foreign people in and out of the salon, and a lot of cash was changing hands) and decided to no longer carry out any work in her Salon. She sent her an invoice for the work she'd carried out but the owner is refusing to pay. She wants a photocopy of my clients passport, driving license, NI number, UTR number and a letter from HMRC to prove her right to work in the UK. 

My client contacted me to ask if she was able to request this and refuse payment. 

It was my belief that only an employer can request this information as they could be subject to fines for employing migrant workers.

I spoke to the home office who agreed with me that in my clients case she does not need to prove the right to work in the UK (especially given that my client has already carried out the work) and that this isn't sufficient reason for withholding payment. Even if my client was a migrant worker, the Salon owner would not be liable for the fine as she does not employ her.

I emailed the salon owner on my clients behalf explaining the above and gave her the home office number for her to check this herself (on the advice of the home office). She ignored this email and is still refusing to make payment. The email she has just cc'd me into, refusing to make payment until she sees all my clients documents also has her solicitor cc'd into it......

Are myself and the home office missing something ?

Replies (20)

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Euan's picture
By Euan MacLennan
06th Feb 2015 14:48

Agreed

You have already gone the extra mile for this client by involving yourself more than you should have done as an accountant.  Tell her now to make a court claim.

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By zebaa
06th Feb 2015 17:40

Court Problem

The problem with taking a case like this to court is that this seems like a verbal agreement. Courts like things in writing. To win the case the client will have to prove (on the balance of probability) that the sum claimed is, in fact, owed. He said - she said - is not proof. What the client will find if they go to court is that their written statement will be compared to the defendants written statement. Without something to support the statement both will carry equal weight. In this type of case the most likely result is a quick judgement against the claimant. Do not rush to court.

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Replying to Nickbeachy23:
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By Hknightas
06th Feb 2015 18:05

I don't know if this is proof enough ...

The Salon owner has posted pictures of my client working with customers (doing their hair) in her salon, all over her website, Facebook page and twitter. These have been screen shot. Would this be evidence enough ? 

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By Hknightas
06th Feb 2015 18:16

It all seems fishy to me!

I agree with my client that the whole thing seems a bit odd. 

Even if my client did have to prove right to work in the UK, she could show the salon owner her passport (which she did initially offer to do). Why does this lady want copies of her passport, driving license, letters addressed to her, her NI number, UTR number .... Thats a lot of information about someone ! 

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Replying to Wilson Philips:
By Semper Ubi Sub Ubi
10th Feb 2015 11:34

Too much information

Hknightas wrote:

I agree with my client that the whole thing seems a bit odd. 

Even if my client did have to prove right to work in the UK, she could show the salon owner her passport (which she did initially offer to do). Why does this lady want copies of her passport, driving license, letters addressed to her, her NI number, UTR number .... Thats a lot of information about someone ! 

 

That seems to be too much information to give to someone who has proved to be so unreliable.  Identity theft comes to mind....................

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By mrme89
06th Feb 2015 18:19

Sounds like the owner isn't going to back down. 

 

Tell your client to just put a claim in.

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Replying to lionofludesch:
paddle steamer
By DJKL
10th Feb 2015 11:27

Binding yes, but

snickersinatwix wrote:

You do not need a written contract before you owe someone money.   The plumber came to service my boiler this week.  I didn't sign an agreement before he came but I definitely owed him money when he left....

Although a written contract is useful, a verbal contract is just as binding.

Whilst a verbal contract in most circumstances is binding the difficulty is always proof that the contract exists and its implied terms.

Homologation and Rei Interventus up here in the North used to be the two routes to proving a  contract was in existence which was maybe not expressed in writing (Barring the oath of the other party to the contract which in a dispute is unlikely to be forthcoming)

Whilst the OP's client might have right on her side, quite frankly going to court where you have to:

1. Prove there was a contract

2. Evaluate and prove the sum due under said contract. (the contracts terms)

3. Obtain judgement and recover the sum due

4. Try to get awarded the real costs of the action when the limit on the quantum of costs that may be awarded may be limited by the status of the court- so they will end up your cost.

Appears to be a big ask, the sum involved whilst no doubt significant to the individual is  possibly just not worth the cost of the pursuit.However much it may feel unfair, I would likely advise the client to chalk it up to experience.

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By zebaa
07th Feb 2015 11:41

@ HKn... & snick...

@Hkn... It may be the client can prove some work was done, but the point at issue may well be the TERMS agreed. This is likely to be difficult, I think, from the information given.

@Snick...I do not know what your agreement with your plumber is, but clearly there is trust between you, which is good. He trusts you to pay him & you trust him to do a good job. However if that trust is lost, for whatever reason, then he risks not getting paid.

Note: for this post, to keep thing simple, the doorstep selling regulations have been omitted.

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By petersaxton
07th Feb 2015 12:46

Take them to court

If the salon owner had wanted these things she should have asked for them before agreeing to the work not before paying.

Judges are not stupid they will understand what's going on.

 

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By macaulay147
10th Feb 2015 10:48

Communication requesting info

If you need to go down the small claims route then any communication from the salon owner agreeing to pay once the documents were produced will surely prove liability.

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By elvisisking
10th Feb 2015 11:08

Court

From the information provided by the OP, the salon owner has not disputed the sums due, and has communication showing the only reason for non-payment is because documents not legally required are being unreasonably requested.

The liability is clear, perhaps on writing to the salon owner giving notice of impeding court action (required by pre-action protocol) she can enclose her notification to file a tax return from HMRC, or some other documents that reasonably show your client is correctly registered. If it proceeds to court, your client will have done everything in their power (without giving such a large number of documents it exposes her to identity fraud) to seek payment.

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By TOC
10th Feb 2015 11:30

Salon Owner

Looks like it is the salon owner who needs investigated here. I would report her to HMRC and the Border Agency.

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Replying to paul.benny:
RLI
By lionofludesch
10th Feb 2015 12:29

Agree

TOC wrote:

Looks like it is the salon owner who needs investigated here. I would report her to HMRC and the Border Agency.

I'd get my money first but, yes, I'm not convinced that the salon owner will be all that anxious to defend the claim in court.

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By raybackler
10th Feb 2015 14:30

Fill out the online paperwork

What I do as a first step is fill this out with the court fee added and then add an accountant's administration fee.  Lets say the money owed is £1000, plus £75 Court Fee (not sure of the current fee, which is related to the size of the claim), plus £125 accountant's fee.  Then give them the choice of paying £1000 immediately or £1200 if you hit the submit button and it goes to court.

Judges are excellent at sniffing out the real situation.  In the absence of a written contract the judge will establish the intentions of the parties based on the evidence submitted and arrive at a judgement on the contractual position.

Just go for it!

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By trecar
10th Feb 2015 17:36

Nigerian relatives?

I get the odd email from individuals claiming to be from Nigeria who kindly offer to bestow money on me for the odd favour of sending them some cash. Do you think they are related in any way to the salon owner? I ask because the business practices seem to come from the same camp.

Just send a reminder invoice specifying the services carried and the dates concerned with a copy to the solicitor. Specify that in the event of payment not being received within 7 days court action will commence with the intention of also seeking payment for all costs incurred to date. Then 7 days later commence the action and at the same time send in an anonymous MLR report with dates of cash transactions and notify HMRC of probable tax avoidance actions. Let the authorities, if they so choose, sort the rest of the mess out.

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By DMBAcc
10th Feb 2015 17:39

Don't give.....

ANY personal  information to the salon owner.  Identity fraud is relaltively easy once you have someone's personal ID.  It is incredulous that the salon owner would want so much info.  Even if one abided by every conceivable rule MLR requires you would not need ALL of that

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By David Gordon FCCA
12th Feb 2015 10:40

As said

 

 1)

 Small claims court, no messing about, but remember you must first send a statutory demand.

 2)

 you do not have to give any of that information. "But", there is always a"But". I always advise my clients that they should obtain a copy of the self-employed person's UTR. This because one of the most aggravating experiences is being caught up in a case where the s-e person is fraudulently claiming benefits.

3)

There should always be a contract. suitably worded s-e contracts, including for renters of salon chairs, are easily available from many professional publishers. If ever asked a properly worded contract may save a great deal of heartache. This is always to the benefit of both sides.

 4)

 There is a sign on my office wall. "Verbal agreements" are not worth the value of paper saved by not writing them down". I would add a mental note especially with "Friends". (If you want to stay friends) Accountants including myself are regularly guilty of this omission. At the very least, on completion, obtain a note of satisfaction with the work. It takes only a one in ten thousand chance of an encounter with a two legged rat to ruin a well meaning client. -Unfortunately examples can be provided- 

 

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By petersaxton
13th Feb 2015 04:30

Statutory demand

I think there's some confusion about what a statutory demand is.

I think David means you should formally request payment.

If somebody does receive an actual statutory demand then all they have to do to get it set aside is to say there's a dispute!

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By User deleted
13th Feb 2015 09:06

Is it just me OR could …

One reason for asking to be shown all these documents – might be so that they can be copied and sold on to some of the owners contacts in her country of origin

These documents are worth money and with the current UK appalling border controls one suspects they could be used to gain entry to this country

Definately don't disclose the information

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Stepurhan
By stepurhan
13th Feb 2015 09:22

It's not just you

Semper Ubi Sub Ubi wrote:
That seems to be too much information to give to someone who has proved to be so unreliable.  Identity theft comes to mind....................

trecar wrote:
I get the odd email from individuals claiming to be from Nigeria who kindly offer to bestow money on me for the odd favour of sending them some cash. Do you think they are related in any way to the salon owner? I ask because the business practices seem to come from the same camp.

DMBAcc wrote:
ANY personal  information to the salon owner.  Identity fraud is relaltively easy once you have someone's personal ID.  It is incredulous that the salon owner would want so much info.  Even if one abided by every conceivable rule MLR requires you would not need ALL of that
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