Reply to: Cash in hand - legal?

[ruth11]

I would be more worried about actually getting paid, than fretting about possible tax issues. AND, She's already been binned, why does she want to go back and help them out for such a pittance? She should have some pride and if she needs money get a temp job.

She wants to work for this company, was binned due to closure of the depot she was working in and a restructure where some personnel were moved to another depot, the rest laid off. It was a head count thing rather than a job thing. They've now realised they need someone to do her job, but nobody that moved over was doing it and they don't know how. She went back in the hope that they will realise that they need her and take her back on, permanently eventually. But they can't do that for 3 months due to the redundancy. She's not working there now, but there's still hope because people from other depots around the UK wanted her to stay but it's a bugdet thing and that's not looking so good.

She's been looking for temp work but believe it or not, there's not that much around! She'd do anything in order to be in work, even Bin Collecting, so in this case it was easier to take the money whilst it was on offer and maybe do herself a favour for the long term.

Fingers crossed they pay her as they have assured her. She did fill out timesheets for the hours she worked so there is some paperwork that I wasn't originally aware of.

As for it being a pittance - that's a bit harsh in the current climate. She's only 22, has only done this one job since leaving Uni and one has to start somewhere. The next temp job she gets will probably be worth even less to her.

It's all a means to an end really - she's going through the process to get into the Police Force at the moment. I can't believe how long and drawn out that process is!!

Thanks for all the other replies guys. I've given her what advice I've heard, whatever happens now is up to her.

[electronicfur]

It's up to her to decide whether she trusts them to pay her for the two weeks work.

Although she should fill out a Tax Return then, to declare the £600 income, before doing so she should phone up HMRC.

It is my experience that because the sum is small, they will say it's not worth their while to process her tax return, and tell her she does not need to fill one out. Make sure she asks to get that in writing of course.

Cheers,
EF

[dave20]

As long as the company paying her, is not an employment agency, then paying for her services cash in hand is fine. (It's the same as a company paying a builder to come in and build a wall for them - gross pay)

She could declare this income at the end of the year on a self assesment, then wait for the tax bill.

If she anticipates doing more contract work in the future, then she should register as self employed.

[pmeswani]

One point I think everyone is missing: they made her redundant and then needed her back. Does this mean that the redundancy was unjustified and, if so, doesnt she have a legal claim there?!

It may not have been unjustified... the company was caught with their pants down... found themselves in a tricky situation and wanted her to come back for a short time.

[NotAllThere]

I think it's fairly safe for me to presume you know nothing about her personal circumstances. In which case why the arrogant and judgemental parting shot you cretin.

Because it's his nature.

[Mustang]

One point I think everyone is missing: they made her redundant and then needed her back. Does this mean that the redundancy was unjustified and, if so, doesnt she have a legal claim there?!

[oracleslave]

She should have some pride and if she needs money get a temp job.

I think it's fairly safe for me to presume you know nothing about her personal circumstances. In which case why the arrogant and judgemental parting shot you cretin.

[Turion]

I would be more worried about actually getting paid, than fretting about possible tax issues. AND, She's already been binned, why does she want to go back and help them out for such a pittance? She should have some pride and if she needs money get a temp job.

[Sausage Surprise]

The company are obviously trying to dodge their employer's NI as well as any other responsiblities. HMRC have guidelines as to who is and isn't self employed and I doubt in this case she'd be deemed self employed.

However, it's work and I'd just declare it on my self assessment.

[pmeswani]

Not quite. If you've income that needs to be taxed, you're obliged to request a tax return. The onus is on you. Not HMRC.

Fair point. I was dithering on stating that, but wasn't too sure.

[NotAllThere]

... doing a tax return is not that bad, as long as remembers to do it when requested by the Tax people....

Not quite. If you've income that needs to be taxed, you're obliged to request a tax return. The onus is on you. Not HMRC.

[pmeswani]

I can't see a tax problem for her, as long as she declares it on her tax return. She should probably register as a sole trader.

It's actually the company that's taking a risk - if HMRC investigated and decided she was an employee (not self-employed) the company would have to cough up tax on what she was paid.

I don't think it would be entirely necessary to register as a sole trader. In any case, it would be a bit late now... should have done it before she started the casual job. I am going to guess that she will be signing on, and as long as she declares it before she signs on, it may be ok.

[pmeswani]

Thanks for the replies.

Registering as self employed or sole trader or whatever is something she really doesn't want to do. As is having to fill out a Self Assessment form. She's only 22 and has no intention of being any of those things, she just wants to work.

Trouble is, she only told me about this yesterday and tomorrow is her last day there. I've stressed that she needs to get something in writing from them to prove that she worked there otherwise she's running the risk of not being paid with no way to appeal to get it.

I really wish there was something I could do to help, but I reckon it's a bit late now.

If she doesn't get paid, then she will have to put it down to experience and learn from it. However, if she does, then doing a tax return is not that bad, as long as remembers to do it when requested by the Tax people. (The chances are that the company will inform the Tax office that such work has been carried out). I'm assuming she will be signing on after she finishes tomorrow? If so, I would explain to the Benefits Office (or whatever they are called these days) that she did some casual work and declare any monies she earnt prior to signing on.

[ruth11]

If they are "counting" her as self employed, then yes, she can declare the wages as extra income on her tax return. She should keep all the documentation that the company give her.

However, this doesn't cover the NI that should have been paid. But this is the company's problem. Unless, that is, she needs these wages to take her over the minimum for the year so that it counts towards her pension (if such a thing bothers her).

And there is the little problem of signing off and then signing back on again! Can't help here, have no personal experience of this.

HTH

tim

The company have so far given her nothing at all! I have said that before she leaves on Friday she needs something in writing to say that she worked there and that they will pay her x amount otherwise I'm willing to bet she'll get nothing. Lets hope that she listens to me.

There's no signing on and off to be done. She didn't sign on when she left the first time.

[ruth11]

Thanks for the replies.

Registering as self employed or sole trader or whatever is something she really doesn't want to do. As is having to fill out a Self Assessment form. She's only 22 and has no intention of being any of those things, she just wants to work.

Trouble is, she only told me about this yesterday and tomorrow is her last day there. I've stressed that she needs to get something in writing from them to prove that she worked there otherwise she's running the risk of not being paid with no way to appeal to get it.

I really wish there was something I could do to help, but I reckon it's a bit late now.