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View Full Version : How can tax contributions be paid without NI no.?

Selcalweb.co.uk
12th Mar 2006, 23:05
The (smallish) company I've just started working for don't issue wage slips :sad: but claim they pay me £250 "through the books" and £45 tax and NIC get deducted every week out of that and whatever I earn on top goes in my pocket (typically the same amount again).
The wage slip issue aside, how can they be paying my tax and NIC when they don't have my NI no.? Is this extremely obvious that they can't, or am I missing something here?
R

Astrodome
12th Mar 2006, 23:47
The Company is required by law to pay you net of Tax and NI.

They do not need your NI number to stop the deductions but they DO need to notify HMRC and then either obtain these details from you or from HMRC tracing centre.

I am slightly drunk so check these figures however, very broadly speaking:-

£250 per week after £45 Tax and NI equates to £295 pre-tax.

This equates to £15340 pa.

Less your personal allowance at £4895 = £10445 subject to tax and NI.

Less £2090 at basic rate 10% (£209 tax) = £8355

The £8355 is taxed at 22% which equals £1831.10

Therefore your total tax bill should be (1831.10 + 209) = £2047.10

NI is only payable on the amount above £94 which means that only £201 is NIable at 11% which equals £22.11 per week or £1149.72 pa

Therefore your total tax and NI for the year assuming the pay and rates remain the same will be £4346.54 = (2047.10 + 1149.72).

This equates to £83.59 per week

Take £4346.54 from your Taxable salary of £15340 = £10993.46 and divide by 52 and we get £211.41 per week, which broadly should be what you take home.

Your present situation sounds shall we say "unusual", especially with no payslip.

It is YOUR responsibility to ensure that sufficient tax and NI is deducted by the year end.

I believe that a payslip is mandatory.

In your own interests you would be advised to speak quietly with HMRC to check my figures but something sure ain't right here !

whatever I earn on top goes in my pocket (typically the same amount again).
Take a tip, get this sorted VERY quickly. HMRC are now mixed up with Customs and they are NOT nice people when they find a fiddle, which is surely what is happeneing here.

If you get found out, you will end up paying the tax/NI you avoided, plus interest, plus a fine. Take a tip, DONT go there.

PS I used to run my own Company and do the paybills.

Whirlygig
13th Mar 2006, 07:45
You can pay someone without an NI no (a payroll system can use a temporary number - usually beginning TN) BUT they must have your real NI number by the end of the tax year 5th APril 2006 to run their year end reports HMR&C. In addition, they must give you a P60 by 19th May 2006 which you will use to complete your Self-Assessment tax return.

Wages slips are mandatory.

I hear big alarm bells here. Do you have a contract of employment? Or letter stating your Terms and Conditions of Employment. This must detail sickness arrangements, holiday entitlement and disclipinary procedure (amongst other things). Not to have one within 8 weeks (I think) of employment is illegal.

If you get this sorted before the end of the tax year, then you should not be liable to any interest or fines.

whatever I earn on top goes in my pocket

Not good! You should also be taxed (and NI deducted) on this as well. If you ring HMR&C, you should be OK as you have only just started with them. However, your employer will be in deep do-do so request confidentiality!!

Astrodome's calculations look roughly correct but is the £250 before the tax is deducted i.e. you take home £205?

The other thing that is a concern. Did you give them a P45 from your last job or have you signed a P46? This is the form you sign if you don't have a P45 and you will be declaring that that is your only job (in which case they can give you the full single person's tax allowance until HMR&C issue a Notice of Coding) or you state that you have another job in which case you will not have a tax allowance (because this is being used in your other employment) and they tax you at basic rate only (code BR).

However, you will have fun finding the right person to speak to in HMR&C as you need to know your employer's tax office and tax reference (plus they need your NI number). If you can't get this from them, you need to call their helpline which can be found on www.hmrc.gov.uk (http://www.hmrc.gov.uk) .

Good luck!

Cheers

Whirls

cavortingcheetah
13th Mar 2006, 07:55
:)

Thank you all for this most informative post.
Something similar happened to one of my offspring quite recently. I only knew enough to know that something was wrong somewhere and so was dismissed as being an old curmudgeon by the young concerned.
Do parents really knowingly go out of their way to give their children spurious financial advice?:hmm:

Astrodome
13th Mar 2006, 09:19
Whirlygig
Astrodome's calculations look roughly correct but is the £250 before the tax is deducted i.e. you take home £205?
You are quite correct and I am in error. The figure is of course £205 on second reading !

Thank you for pointing that out Whirls.

Selcalweb.co.uk
Ooops....sorry an error on my part ! :ooh: :O :O :O :O

The annual Gross is £13000

The adjusted tax bill is £1532.20 (excludes NI)

Just re-run the figures again, as the take home pay and tax will be slightly different to what I quoted.

You are also highly advised to do as Whirls said and speak with HMRC. They will not do anything to you, as you will have brought this to their attention.

Despite rumour to the contrary, they are quite helpful, and will give a lot of good advice out for free.

However if the position is complicated it is always advisable to speak with an Accountant as on occasions the HMRC staff do not fully understand more complex issues and different people/offices give different advice.

topcat450
13th Mar 2006, 09:37
I'd suggest sorting this sooner rather than later. It sounds similar to the company my little brother used to work for. They shafted him, got rid of him without notice (same as you hadn't been giving him wage slips but promised him they were paying tax), anyway, he needed his P45 and pestered them for it for ages. Eventually he got given a piece of paper with "P45" hand written on the top and random arbitary figures on it.

It'd have been funny, but thats when I lost my rag with them, went down the and eff'd and jeff'd at him. His response was "who the f*** are you, some kind of tax inspector... f*** off" So Monday morning, a long chat with our local tax office who said they'd no record of my brother ever having worked there, he'd not been paying NI and all the other mandatory stuff, and ended with them paying him a visit, having had my bro tip them off for various other illegal things they got upto. They were shut down 2 months later.

Lesson 1 - get these things sorted as soon as, you take the bull by the horns and don't just trust them when they say they'll sort it.
Lesson 2 - never f*** with TopCat or his family! :ok: