I have a client who I have been doing the payroll for for over 3 years and about 8 months ago she took on a young girl doing about 6 to 8 hours a week. I have discovered over the last couple of weeks that it is not the young girl doing the work it is her mother who already has a full time job.
I am guessing she is avoiding tax and NI but dont really know how to deal with the situation. Is it my responsibility or the employers?
Unfortunately the employer is also a friend of mine so I feel in a very awkward situation.
Hi Chris
How odd you cant see your post. Is that just when you are typing an answer on a phone? Ive had that before, or sometimes when using advanced editor.
Hi Sam
Are you a member of a professional body? I only ask as they have legal helplines so you could check this out and get some advice from them.
Essentially if the mother is doing the work and you are paying the young girl then your friend knows about it (clearly) and is therefore allowing tax evasion, albeit it might be from a naive position. So you mentioning your suspicions to your pal would be classed as tipping off. You should not mention it and instead file a report - where that goes depends on your own work status. Im guessing Sam that you are a sole practitioner so its to the NCA.
Now - if your pal has mentioned in passing to that eg the young one had been ill so her mother covered a couple of her shifts then you can have the conversation with her and ask - 'when am I going to get the mother's payroll information, chat about sick pay, is she back at work yet or are you will you be P45-ing the young one, type of questions that will extract the information you need, which then prompts a discussion around the legitimacy of what she is doing if she gives you the 'dodgy' answers. If she continues then to do the wrong thing - you go back to option one of reporting it! Plus dis-engaging.
Yet another in the ever growing list of why you should never do work for your friends.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
So I would be wondering why is the mother working for your pal for free? What does she get out of it? Are they connected in any way? Is it to gain some kind of experience? eg a week's work experience? CIC so volunteering? How many hours in the mother doing? Does the daughter work there at all, is she off sick, has she ever actually done any work there, is the pay she getting for 'being off sick' reasonable and in line with other workers. These sorts of things. Your pal needs to be careful of not paying the mother as she is then possibly breaching minimum wage regs, never mind the other half of the story.
Pal or not - never trust anything at face value, always question it.
Small town or not, you could lose your AAT licence, your livelihood and worse if you fail to report a suspicion. You may well not have anything to worry about once you have had your conversation.
Sounds like you have a way in to have a conversation given what you have been told already - just go in with the 'I need to clarify something you mentioned recently' stance. Then see what their reaction is when you explain the right /wrong way to do it going forward. If you need to disengage, just say you are not prepared to lose your licence.
Dont think you need to mention it to the Accountant - depends what kind of relationship you have with them, plus need to bear in mind confidentiality.
I would be phoning AAT for some guidance after you have had your chat and before you act further.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
A family member recently approached me about paying my daughter to do some work that I would potentially be doing for them. (I had declined payment as I need to keep my income under the level where my daughter will be eligible for a particular college grant next year).
I declined pointing out that in order for my just turned 16 year old daughter to actually work part time she needed a licence from the council and permission from school which in her particular corcumstances they would be unlikely to give. If thie realtive actually wants to employ my daughter PROPERLY on a Saturday job when she is in college next year that will be a different thing but there are restrictions on the type of work and hours of work a young person can do as well as the legal/tax implications.
Thank you Jo, I will be having a meeting next week. In my heart as the daughter is mid teens (the employer has a licence fro the council) I believe although can't prove it that the mum is topping up her income as she already has a job and doesn't want to declare the extra. They are friends but I don't believe she is doing the work for nothing.
Wish me luck.
Hi Julie, sounds remarkably familiar and well done for sticking to your guns.
Sorry for taking so long to reply, I thought I had ticked the notification option by email!
