Would HMRC penalise my son?

Published by Ruth Cornish on 09 October 2018.
Last updated on 09 October 2018

Q

My son began a new job last October. Initially, he was told he had to register as self-employed, but he was given no information about how to do this or receipts for his wages. In February, his firm moved him on to PAYE. What we aren’t sure about is what happens to the wages he was paid between October and January that weren’t taxed. Will he be penalised by HM Revenue & Customs (HMRC) when it catches up with him?

The company seems to be very lackadaisical in its operation, as he still only gets payslips occasionally and he’s never signed a contract or been offered a workplace pension. He didn’t receive a P60 in April either. It has also completely changed the job description he was hired to do and changed his working hours slightly as well. Needless to say, he is looking for another job!

From:
JW/Surrey

A

It certainly sounds as if your son’s employer needs to prioritise engaging the services of an HR and payroll consultancy. If it doesn’t, it will continue in a reactive cycle of creating problems to sort out and run the risk of losing dedicated employees during the process.

Small companies can often grow very quickly and struggle with the people side of the business, as well as the raft of responsibilities they often don’t anticipate.

It doesn’t sound as if your son has ever been self-employed and if he did not register as such, would probably be considered an employee with the company from October last year as employment afterwards was continuous.

He needs to contact his local tax office to explain the situation, so it can advise him and make any necessary adjustments for the period of ‘self-employment’. Always better to be up front and notify HMRC rather than waiting for it to catch up, and, of course, this will mean it will become aware of the company’s current disorganised approach.

While he is speaking to HMRC, your son should also mention that he doesn’t have a P60. Your son’s employer should have given him his P60 by 31 May after the end of the tax year (5 April), so that, if he needs to, he can complete a tax return or claim a repayment of tax. If he explains the situation, HMRC will then contact your son’s employer to obtain the P60 for him.

This article was written in response to a reader’s question. If you have a financial or work/career question that has left you scratching your head ask our panel of experts who will aim to shine some light on the matter.

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