Employer has not paid over tax/NI

New client - looks like his previous employer hasn't submitted payroll details/paid over tax and NI

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New client who became self employed in Feb 2024 and was (or so he thought) employed for the last couple of years prior to this.

I prepared his accounts to 05/04/24 and asked for a copy of his P45 as he would have been able to reclaim some tax back however it seems impossible to get his previous employer to provide a copy. He received 4 payslips in April 2023 (he was paid weekly) and then after that hasn't received any paperwork but the same weekly payments continued up until when he ceased employment.

He got a P60 for 22/23.

On his personal tax account it is not showing any employment income at all, no NI contributions for the last couple of years so therefore no state pension qualifying years.

The employer provided him with a work van for usage during work hours, told him where he would be working and provided all tools and materials for each job. 

He doesn't have a contract but has an email with details of when he was furloughed a few years ago so again this all points to him being employed.

How do I start to deal with this?

I want a paper trail and so am thinking of writing in to HMRC but do I initially contact self employment as we're doing his tax return or do I contact PAYE as this is where the issue is?

Just wondered whether anyone else had come across this.

To make things worse (although perhaps predictably) his employer's company is currently being struck off at Companies House.

Many thanks

Chicka

 

Replies (9)

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RLI
By lionofludesch
19th Apr 2024 16:49

You have some payslips, which are evidence that tax (and NI) was deducted.

You have some bank statements which show how many weeks he was paid.

You can produce a spreadsheet to reconstruct his P45.

The taxpayer just needs to show that tax was deducted. He doesn't have to prove it was paid over (unless he himself is the rogue employer).

Thanks (2)
Replying to lionofludesch:
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By FactChecker
19th Apr 2024 20:54

Glad you added "(unless he himself is the rogue employer)" ... always my first suspicion in these cases (and often correctly so).

Can OP confirm this is not the case (and that employer was not related or connected in some way)?

Thanks (2)
Replying to FactChecker:
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By chicka
19th Apr 2024 21:54

Thanks for the reply!
I can confirm he isn't the employer himself or related in any way at all.
I've actually spoken to HMRC and even though I assumed this would be some breach of data protection, when I gave the PAYE ref from the P60/payslips - they said it related to a completely different company (based miles away when I look at Co House).

Thanks (0)
Replying to chicka:
RLI
By lionofludesch
19th Apr 2024 22:48

chicka wrote:

Thanks for the reply!
I can confirm he isn't the employer himself or related in any way at all.
I've actually spoken to HMRC and even though I assumed this would be some breach of data protection, when I gave the PAYE ref from the P60/payslips - they said it related to a completely different company (based miles away when I look at Co House).

Interesting - but not relevant.

Your client has evidence that PAYE was deducted. That's all he needs.

Thanks (1)
Replying to lionofludesch:
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By FactChecker
19th Apr 2024 22:55

Indeed ... my question regarding ownership or other involvement of client in the management of the company related to the different (but now precluded) possibility of dual responsibilities.

As per my earlier post (but appearing further down this thread!) that should be the evidence, as lion says, that he suffered deductions in 2022-23.
The year after will be tougher - but see my other comments/hints.

Thanks (3)
Replying to FactChecker:
RLI
By lionofludesch
19th Apr 2024 23:12

FactChecker wrote:

The year after will be tougher - but see my other comments/hints.

I'd be very confident of a satisfactory outcome. The OP says he has payslips for four weeks and the same payment continued from May onwards. It's enough to infer deduction of PAYE on the balance of probabilities.

Thanks (1)
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By Leywood
19th Apr 2024 16:53

Get your client to object to the strike off, keep it close in diary to ensure he keeps objecting in a timely fashion so it doesn’t sneak through.

Report the company who made the regular payments to your client (clearly payroll if it was the same each week), to HMRC and ask them to investigate. You will have to push them! Hmrc should be able to advise your client if they have had any RTI reports.

Get your client to get some advice from ACAS re the missing paperwork and tax/ni payments. Client may need to issue solicitors letter to employer.

His tax return can wait for now.

Thanks (1)
Replying to Leywood:
RLI
By lionofludesch
19th Apr 2024 17:06

Leywood wrote:

Get your client to object to the strike off, keep it close in diary to ensure he keeps objecting in a timely fashion so it doesn’t sneak through.

Report the company who made the regular payments to your client (clearly payroll if it was the same each week), to HMRC and ask them to investigate. You will have to push them! Hmrc should be able to advise your client if they have had any RTI reports.

Get your client to get some advice from ACAS re the missing paperwork and tax/ni payments. Client may need to issue solicitors letter to employer.

His tax return can wait for now.

Whilst I wouldn't contradict the above, it's unlikely that HMRC would contest your reconstructed workings. If they disregard the PAYE which was deducted, it's not unreasonable to disregard the gross pay too - which would lead to disregarding the allowances used in the missing weeks. That would benefit your client.

Depends on the evidence but, from what you say, you have plenty.

Thanks (1)
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By FactChecker
19th Apr 2024 21:03

Sounds cut'n'dried for 2022-23:
- "He got a P60 for 22/23".
Presumably/hopefully the payments he received tally closely to those P60 figures?

It's the (part) 2023-24 that's more problematical IF "after (the 4 payslips in April 2023) he hasn't received any paperwork"... but IF "the same weekly payments continued up until when he ceased employment" then that's more promising.
Where were these payments received? And if in a bank account (hopefully) do they show any sort of reference?
Perhaps most importantly are the amounts (give or take) the same regularity and amounts as in the previous year - indicating that these too were tax-deducted pay?

Thanks (3)