Advice about going from cash in hand work to contracted salary

PhillyDee said:
Thats not how PAYE actually works.

Otherwise no one would pay any tax at all until a few months later.
Theres a quick here: http://www.pistonheads.com/gassing/topic.asp?t=759129
NI is differnece

And as for "Clear he would rather not have me on the books", means you clearly are not, he should be paying employer NI and tax right away. That part is non negotiable. Unless there is something you are not telling us, this is indeed Tax Evasion, not just you, but him also.
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Thanks for clearing that up for me; I get it now.
 
dirtychinchilla said:
This is all my recorded income, I have no other source of income, and am not involved in tax evasion or avoidance, and as I stated at the beginning of this post, I am trying to ensure that everything is above board, so I'd appreciate you not biting my head off when I'm actually trying to seek advice.
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Regardless of the Income Tax situation you're not paying the National Insurance that you should be.

There's no annual allowance for National Insurance.

If you're getting paid £6.19/hour for 40 hours then that's £247.60/week.

As this is above the Lower Earnings Limit of £107/week then both you and your employer should be paying National Insurance Contributions.
 
LOAM said:
If he is paying you everything (gross) by your employer you are in effect a "sole trader" and should be registered as such with HMR. YOU, as someone who's is currently self employed will be liable for class 2 NI contributions and required to submit a tax self asseskent each April regardless of if your actual income is over the statutory min tax threshold. You currently are paying no NI and it will bite you if you then go and try to claim JSA in the near future, they will ask what you were doing for this period.


If you are already claiming JSA at the moment then that's a whole new discussion.
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Haha well I am certainly not claiming JSA. I shall make sure I submit a tax self assessment then, now everyone can get off my back.
 
PhillyDee said:
No problem, its not just you that does not understand tax and the PAYE system, most of the company I work for also does not understand, I think even the payroll department just muddles along! :D
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Hahaha well I appreciate you helping me out there. Hopefully my understanding will soon be improved with the advice of helpful people such as yourself.
 
To make things clear, I'll state again, I am well below the threshold of taxable income and am well withing my rights to earn below £7,475 before being taxed. I am not attempting to avoid paying tax, and, as is evident by my OP, am trying to ensure that I do pay taxes. So stop hounding me about that.
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But you are not.

Using £6.08 minimum wage when you started (now £6.19)

(40*6.08)*26 = £6323


By your logic you only have 1 month and a bit before you should be paying tax.

Too me this sounds like you're robbing the tax man, which is illegal.
 
dirtychinchilla said:
Are you saying that taxable income is judged on projected earnings for the year and not what you actually receive?
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That is why it is called Pay As You Earn.

That is also why you sometimes get a tax rebate if you have paid too much. Is sounds to me that you are earning but not paying tax and not paying NI conts either. Both you and your employers are breaking the law.

Sorry if this comes as a shock but that's the facts.
 
Swordfish said:
That is why it is called Pay As You Earn.

That is also why you sometimes get a tax rebate if you have paid too much. Is sounds to me that you are earning but not paying tax and not paying NI conts either. Both you and your employers are breaking the law.

Sorry if this comes as a shock but that's the facts.
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Hater! :p
 
dirtychinchilla said:
No, I mean the people who are having a go at me when, in fact, I am below both the NI and tax thresholds and therefore do not have to pay anything.
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You're not below the threshold for paying NI.

Earnings over £107/week are liable for National Insurance Contributions.

There's no annual allowance like there is with Income Tax.

And has been mentioned you should also possibly be paying Income Tax as well and it'll be sorted out at the end of the tax year if you've paid too much.
 
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