Working In The U.k

[stevebow]

Hi everyone,

My wife is here in the U.K on a Two year settlement visa from Thailand and has just been offered a job in a small clothes shop. They are offering her 15 Hours per week but have stated that it will be cash in hand but will be going through the books. My concern was how she was going to pay her taxes but the manager has assured me this is not a problem as she will be earning less than 85 pound per week. The reason i am asking is that he wants her to start Monday morning but i cant ring the tax office to verify his information till Monday. Does anyone know if he is correct?

Ps. I have an appoitment to get her a National Insurance number early January.

Thanks in advance.

Steve and Bow

[the scouser]

That the pay is cash-in-hand doesn't mean that it's not going through the books, but your wife should still receive pay slips and a P60. Additionally, both she and the employer may be liable for NI contributions, although you should check this out with HMRC.

Perhaps your wife could start on Monday and you could run the scenario past HMRC. If it's at all fishy, then she can reconsider.

Scouse.

[the scouser]

The current tax allowance is just over £5200 p.a., so an individual can earn £100.00 per week with no tax liability. However, I'm pretty sure that NI will be payable and it's possible that the employer is seeking to not pay his 10% contribution. Have a word with HMRC.

Scouse.

[Mahout Angrit]

Neither your wife nor her employer has to pay NI contributions if she earns less than around £98 per week (you can check the current exact figure) so that means she can work 18 hours a week on the minimum wage of £5.35 / hour before NI contributions have to be paid.

[pointofview]

The current tax allowance is just over £5200 p.a., so an individual can earn £100.00 per week with no tax liability. However, I'm pretty sure that NI will be payable and it's possible that the employer is seeking to not pay his 10% contribution. Have a word with HMRC.

Scouse.

If she is earning below the tax liability level and Ni level - which she will be - then whats the problem!

As an employer he can pay her as he wishes - cash, check, into a bank account. Why the concern

take the guy at his word, he is giving her a job. There is no employers contibution for 15 hours/less than £100- hence 15 hours, henc less than £100

[niggle]

Whether its cash or not she must still have a payslip and P60 - this is invaluable for a person on a resisency permit.

What is he putting her wages in the books as ???

[distortedlink]

Anyone who works in the Uk for cash in hand, whether or not they qualify for full tax allowance is working illegally.

Although your wife may not earn enough for tax stoppages, she is still liable to pay NI contributions and all income in the UK, the same as in Thailand must be declared.

If your wife does not pay NI contributions she is not entitled to receive income support, sickness benefits, incapacity benefits, cannot take her employer to an industrial tribunal if any grievance with the company/private employer or claim a state pension later on.

The easy solution is for you to make enquiries at the Inland Revenue office, not on Thai visa, as this is UK tax enquiry, nothing to do that your wife is Thai, unless or course you are trying to get away with it.

Edited December 16, 2007 by distortedlink

[Mahout Angrit]

Anyone who works in the Uk for cash in hand, whether or not they qualify for full tax allowance is working illegally.

Although your wife may not earn enough for tax stoppages, she is still liable to pay NI contributions and all income in the UK, the same as in Thailand must be declared.

If your wife does not pay NI contributions she is not entitled to receive income support, sickness benefits, incapacity benefits, cannot take her employer to an industrial tribunal if any grievance with the company/private employer or claim a state pension later on.

The easy solution is for you to make enquiries at the Inland Revenue office, not on Thai visa, as this is UK tax enquiry, nothing to do that your wife is Thai, unless or course you are trying to get away with it.

Of course she can receive payment in cash, there is no requirement for wages to be paid via a bank and obviously it is not illegal.

She is not liable to pay NI contributions and neither is her employer if she earns less than £100 per week, if her employer gives her pay slips he will, no doubt, also log her wages for PAYE but if she doesn't reach the minimum level on the tax table (and she wont) he is not required to deduct and income tax. At the end of the tax year she will get a P60 to confirm her years earnings and it will clarify if she needs to pay tax.

I'm sure his wife is not thinking about income support or god forbid, incapacity benefits but she will still be entitled to paid leave pro rata.

Other benefits such as state pension will be claimed via her husbands entitlement, she wont be entitled to extra in her own right but I'm sure she's not thinking about pensions right now.

[distortedlink]

Anyone who works in the Uk for cash in hand, whether or not they qualify for full tax allowance is working illegally.

Although your wife may not earn enough for tax stoppages, she is still liable to pay NI contributions and all income in the UK, the same as in Thailand must be declared.

If your wife does not pay NI contributions she is not entitled to receive income support, sickness benefits, incapacity benefits, cannot take her employer to an industrial tribunal if any grievance with the company/private employer or claim a state pension later on.

The easy solution is for you to make enquiries at the Inland Revenue office, not on Thai visa, as this is UK tax enquiry, nothing to do that your wife is Thai, unless or course you are trying to get away with it.

Of course she can receive payment in cash, there is no requirement for wages to be paid via a bank and obviously it is not illegal.

She is not liable to pay NI contributions and neither is her employer if she earns less than £100 per week, if her employer gives her pay slips he will, no doubt, also log her wages for PAYE but if she doesn't reach the minimum level on the tax table (and she wont) he is not required to deduct and income tax. At the end of the tax year she will get a P60 to confirm her years earnings and it will clarify if she needs to pay tax.

I'm sure his wife is not thinking about income support or god forbid, incapacity benefits but she will still be entitled to paid leave pro rata.

Other benefits such as state pension will be claimed via her husbands entitlement, she wont be entitled to extra in her own right but I'm sure she's not thinking about pensions right now.

Of course any employer can pay wages any way they wish, including cash, plus Ni contributions are not deducted from wages if under a certain amoumt.

But where I come from, cash in hand means, being paid wages, but not regisistered as employed if working for a company/private person.

although if not being deducted NI fees because the person is not earning enough, they still get credits if legally working.

Often persons use this method of cash in hand, if they are claiming benefits and want to hide the fact that they are also working, earning extra money on the side.

If not on the fiddle, there is no reason not to be registered with an employer as a worker.

Edited December 16, 2007 by distortedlink

[stevebow]

Thanks for all the advice so far. I think the best and safest option is to contact the inland revanue myself Monday morning.

Thanks again.

Steve and Bow

[Expat2B]

As an employer myself (and previous notional PT employer of my Thai Wife, when she was my GF studying here in the UK), it is perfectly possible to pay (or be paid) in cash for work. The employer has an obligation to report payments to HMRC as part of their periodic return, even if no tax or NI is payable. Similarly if an employee is paid in cash they have an obligation to report any income which could give rise to a tax liability to HMRC (via a tax return if necessary). The crucial test is the Tax Free Alllowance and LEL (Lower Earnings Limit, which I think is the same figure as the tax free allowance). If the employee earns less than this on a weekly basis (not on average, specifically on a week by week basis they earn less than 1/52 of the tax free allowance) then no NI is payable by either employee or employer. If the employee earns more than 1/52 of the tax free allowance in any given week then both employers and employees NI becomes payable for that week (unless the employee is also a director of the company in which case earnings can be averaged over the entire 52 week period).

I legitimately paid Mrs E2B the entire Tax Free Allowance in cash with no deduction for NI (Employer or Employee) and no tax deduction. This helpfully reduced my corporation tax bill by c.£1000 too. This was reported to HMRC as part of my annual Employers filing and I expect I would definitely have heard rumblings from them by now were this to be a problem.

As a new employee the OP's wife will need an NI number which can be obtained from a Job Centre Plus (but usually after a wait and jumping through several bureaucratic hoops). In the first instance however the employer may use a temporary NI number for your wife. The fact that she already has a job should help to expedite the provision of an NI number.

The only thing the OP should be wary of is any "deductions" from his wife's pay. Unscrupulous employers may make deductions from pay which are never reported to HMRC. Based on the scenario given, this seems unlikely since the OP's wife should not have to pay tax or NI (so long as the amount they are paid per week is low enough as outlined above).

Edited December 17, 2007 by Expat2B

[Expat2B]

The current tax allowance is just over £5200 p.a., so an individual can earn £100.00 per week with no tax liability. However, I'm pretty sure that NI will be payable and it's possible that the employer is seeking to not pay his 10% contribution. Have a word with HMRC.

Scouse.

NI is only payable by employer or employee in any week where the employee exceeds the Lower Earnings Limit (which I am pretty sure is 1/52 of the total tax free allowance).

[Expat2B]

I'm sure his wife is not thinking about income support or god forbid, incapacity benefits but she will still be entitled to paid leave pro rata.

Other benefits such as state pension will be claimed via her husbands entitlement, she wont be entitled to extra in her own right but I'm sure she's not thinking about pensions right now.

Actually I beleive it is possible to have access to benefits such as pensions and other contributory benefits even if an employee does not earn wnough to pay NI. It certainly always used to be the case that there was a weekly amount which was below the level that would trigger payment of tax and NI, but above the minimum threshold such that an employee received all the advantages of an NI contributions record without actually having to make the contributions.