Employee Invoicing Outside of PAYE

Should this invoice be rejected

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An active employee has forwarded an invoice/bill on his active project from a consultant registerred at his home address.

The CH records show that he is not one of the persons listed at this company.

However, the company is registerred address is the employees home address.

Is this an attempt to avoid PAYE/Payroll? Should this transaction proceed?

Replies (6)

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By David Ex
08th Aug 2023 12:35

You’d need to speak to the person who engaged the consultant to undertake work and maybe also the person, within the organisation, responsible for procuring and authorising third party services. No-one here can tell you whether the circumstances are legitimate or not. Obviously looks odd but we don’t know the full facts.

Thanks (2)
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By Hugo Fair
08th Aug 2023 13:04

Why are you asking (in the sense of how does the validity or otherwise of this invoice concern your role)?
Your previous questions all appear to have been Payroll related, which may just be coincidence but is why I ask the above question.

Also, I don't understand the meaning/relevance of the word 'active' ... the fact you've used it twice suggests it's important but, if so, in what way?

However as David says (and I paraphrase):
- presumably someone engaged the consultant (and is therefore responsible both for checking that contracted work is delivered and that invoices for this are authorised or rejected as appropriate)?
In which case, bring your 'concerns' to the attention of that person.

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By DKB-Sheffield
08th Aug 2023 13:38

I question whether this is relating to an attempt to avoid PAYE, or whether the OP is questioning if the employee is actually working for the third party. Realistically, the only person that could know that is the engager or engagers.

The mere fact an employee's home address is the same as the company's registered address is merely a suspicion, and in no way conclusive. I have H&W, H&H, Partner & Partner, Mother & Son, Housemate & Housemate clients... and many more, running companies, being employed and living at the same address. None of them do this to 'avoid' PAYE. Many don't have the same surnames.

Furthermore, I know of accountants who provide their home address as RO for clients. Applying a variation on your suggestion, would all work carried out for such clients need to be through PAYE?

I'd suggest, the fact the 'active' employee isn't named at CH (S/H, Dir, PSC) it may point towards the company being unrelated to that 'active' employee.

Either way, there is little to prevent an 'active' employee also providing goods or services to an employer through a company they have an interest in. There are numerous conditions, IR35 would need to be considered, nature of supply may be in point... but it's not completely 'outlawed'.

Incidentally, just checking that the employee doesn't live in a flat in Cardiff? The one where thousands of companies were registered (although, not fraudulently according to Jimbob!

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RLI
By lionofludesch
08th Aug 2023 13:43

What happened?

It's all so vague.

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By tom123
08th Aug 2023 14:34

What sector are you in - what size is your company?

If it is a 'close' company, and those senior folk are happy with the arrangment - not your problem..

If it is public sector, or charity or something, and everything is carefully hidden - then that could be a different matter.

How much are we talking about?

A few hundred pounds to an employees relative for a skill you don't have in house is one thing.

Regularly paying out large amounts is quite different.

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By paulwakefield1
09th Aug 2023 08:37

Or, if you are of a more suspicious nature, has the consultancy work actually been provided? Is the employee also responsible for approving the invoices (is he/she in charge of the project?)?

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