Client wants to Report Employer to HMRC

Client wants to Report Employer to HMRC

Didn't find your answer?

A husband a wife client have had an irregularity with their PAYE from 2013.
The husband works for the UK company and the wife used to work for a US subsidiary. In 2013 the UK employer split the husbands salty between them apparently to avoid paying employers ni.
My clients other income has tipped her into the additional rate and she is trying to get them to correct the 2013 payroll.
The employer has refused saying it wasn't an error.
Client has emails and phone recording where she told them the transatlantic was fraudulent etc and further emails chasing them to change it from early 2014 before the window closed.
I have tried to be diplomatic and asked the employer to do an earlier year update. They have refused. So client wants to report them to HMRC. I am inexperienced in this area and not very sure what I am doing. Any advice would be great. Thanks.

Replies (13)

Please login or register to join the discussion.

avatar
By AANM
17th Jun 2015 23:44

"Salary" not "salty"

Thanks (0)
RLI
By lionofludesch
18th Jun 2015 07:37

Auto correct

And yet there is a etymological connection.

Love auto-correct.

Let the client report the employer if that's what she wants. But don't do it for her.

It's a can of worms with no proof either way.

Thanks (1)
avatar
By Matrix
18th Jun 2015 09:30

I am sure the couple wasn't complaining when there wasn't any additional tax to pay :)

Thanks (2)
avatar
By AANM
18th Jun 2015 09:45

Well they did initially....

When they received a statement from HMRC which is the first they had heard of the salary being split. They did complain to the employer and asked him to correct it. They were hoping the correction would be done before the July deadline but that didn't happen. Its been two years though so my feeling is that if they went to HMRC the first question would be why didn't report it then? Why now? And the answer would be because suddenly we have a high tax bill to pay.

Thanks (0)
Replying to stepurhan:
Stepurhan
By stepurhan
18th Jun 2015 09:52

Please clarify

AANM wrote:
When they received a statement from HMRC which is the first they had heard of the salary being split.
What do you mean by this? Were there not P60s from the employer prior to this that showed the split? Were there not payslips that showed the split? It just seems extraordinarily unlikely that this was the first they heard about it.
Thanks (1)
Replying to lesley.barnes:
RLI
By lionofludesch
18th Jun 2015 10:02

Bank

stepurhan wrote:

What do you mean by this? Were there not P60s from the employer prior to this that showed the split? Were there not payslips that showed the split? It just seems extraordinarily unlikely that this was the first they heard about it.

And what went into their respective bank accounts ?

Thanks (1)
Stepurhan
By stepurhan
18th Jun 2015 09:47

Timings

Am I right in saying that your client has only objected once it became apparent she was moved into additional rate by this. I think this is what Matrix is getting at. 

Because I cannot help thinking she must have been aware that the split was happening well in advance of this. It might be worth pointing out that would seem to make her an accessory to the problem, and her keenness to "correct" it now might be viewed with scepticism if it was investigated. For that matter, if you believe that this arrangement was fraudulent, you might want to consider an MLR anyway.

Thanks (1)
avatar
By User deleted
18th Jun 2015 09:49

It's got nothing to do with you

Stand well back and let them get on with it. Presumably she was aware of the 'error' in 2013 - so why didn't she have it corrected back then?

[EDIT - crossed with Stepurhan's post. And I agree with him that, while you should not get involved in the dispute itself, you should consider your MLR obligations.]

Thanks (1)
avatar
By User deleted
18th Jun 2015 09:55

Are you saying ...

... that the spilt was a paper exercise only? Otherwise, she must have known about it when she suddenly started receiving salary payments that she wasn't expecting. At the very latest, her P60 ought to have triggered a question.

Thanks (1)
avatar
By AANM
18th Jun 2015 10:12

There was a no P60

The money appeared in their account and she initially thought it was redundancy from the US subsidiary. The last P60 she got from them was for 2012-2013 which showed her salary for the year was £1600. This was earnings for January 2013, the last month she worked for the US subsidiary. The HMRC earnings summary came in June 2014 and showed her 2013-2014 income as £19964. She wasn't employed there at the time

Thanks (0)
avatar
By AANM
18th Jun 2015 10:09

They have a joint account for salaries which further confused matters

Thanks (0)
avatar
By User deleted
18th Jun 2015 10:21

In which case

She should simply write to HMRC and confirm that the 2013/14 figures are wrong, because she was not employed by the company during that tax year (and received no P60 for that year - she should not have had a P60 for 2012/13 either - she ought to have had a P45 instead). And let HMRC take it up with the employer. To repeat, though, you should not get directly involved, because it is quite possible that you are being told only half the story.

Thanks (1)
avatar
By Ammie
19th Jun 2015 11:56

SCHEME OR SCHEMING?

Excuse the sarcasm, its Friday and I am light hearted.

This is clearly not an approved avoidance scheme. This has MLR and SOCA written all over it.

People need to be careful what they wish for because such circumstances have a habit of turning and biting back!

A meeting with you clients to settle the issue and clarify what is the substance of the arrangement is is needed. If it is, as it seems, then you are placed in a very compromising position and you will need to safeguard yourself and honour your statutory duty to declare any unsavoury goings on. Having said that depending on the amounts involved there is more than a fair chance nothing will be followed up anyway, and importantly your professional conscience remains in tact.

Reporting the employer is certainly going to draw your client into the "bun fight" and probably also lead to the employment being terminated, which may or may not be a bad thing, depending how far reaching the news gets in the works industry. We live in a small world.

If all is in fact correct my advice will be be "pay the tax" and plan better for the future. Stir the hornets nest at your peril.

Thanks (1)