Not paying National Insurance and PAYE!!!

Well thats fairly much to the top of the list of things not to do with the Inland Revenue. Failure to operate a PAYE scheme and what is more deducting PAYE and not paying it over is a very severe situation to get into and something that need to be dealt with face on and with full disclosure. I don’t know how much money you are talking about and for how long you have defrauded the IR, but unless this was for a very short amount of time you may get the book thrown at you for this, fixed fee fines, penalty interest and upto a 100% tax geared penalty on top. It will be a case of negotiation with the IR as to what level of fines are levied based on your co-operation, so very much a damage limitation exercise. You may find the inspector will come down hard on this, especially if it is their discovery as opposed to your "coming clean", so it may be beneficial to have some independent adviser about who is worth arguing about and what isn’t. Obviously this will cost a lot more money and time than had you take appropriate advice at the time of employing this person. You may be able to agree a payment schedule if you have genuine financial difficulties, what you cant do is duck your responsibilities as an employer to run a PAYE scheme and pay over amounts deducted as tax. This is after all straight forward theft.
------------------------
James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773

---------------------------
Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT

Time to get your house in order with full details as to the wages paid and the amounts deducted as well as full information on the employee involved. If you deducted amounts and not paid them over, then dependant on your dicusssions with the Inland Revenue you may find yourself in deep water as it is both a civil and criminal offence.

In the main this is a common problem and the Revenue almost always take the matter to court and get a payment order if there is a proveable payment problem. It all depends on the amount involved as to how robust they are in chasing this through insolvency or charge on your house etc.

James has spelled out the problems with them finding it rather than you declaring this up front so be prepared for introspection for some time to come from this. Be prepared for a hard time in the questions as it most likely will not just be a discussion on PAYE but into other aspects of your business also.

------------------------
Lee Schwartz Lime One Ltd www.limeone.com 01244 852550

Hi, I think I need to do get the books in order first and see what amount we are talking about... but its about 6 months wages.... I sent off the form when he started but then never got round to paying the money owed as things have been so tight. Do you think they would accept installment payments? Also if I close the business down (sole trader) would that get off my back? Can this recovery officer remove my possessions or do they have to go to court first?

As a sole trader you and the business and inseparable legally, closing the business will make no difference to your liability I imagine that this visit will purely be to assess your liability and see what else you haven’t declared (like your sole trader income) and you will be able to discuss payment or the amounts owed. They people arnt baliffs and wont be taking your TV with them when they leave.
------------------------
James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773

---------------------------
Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT

Best tip I can offer is 'fess up'!

Don't be at all evasive when they call and ask questions.  The more helpful and open you are the less likely they'll be inclined to shaft you.

...maybe...

------------------------
Logo Design • Vector Conversion • Print
Eagle Imagery™ It's the only way to be sure...
UK Business Labs http://www.ukbusinesslabs.co.uk/forums/