P60s.... Salary Slip ILR Important questions

[muhammad.aftab]

Hi Guys,

One of my friend / client is on Tier 1 visa and it is expiring in July2012. His route was HSMP 2007 July (2years) then 2009 July Tier1(3years) so now ILR is due in July 2012.
Issue is he is working in a Company and they are paying him £2500 a month.... however they are issuing him salary slips every month which shows all relavent codes and figure for example tax deduction... NI deduction. Now hidden story is company is not deducting any tax and NI at all.
Now My suggestion for him was to speak to employer, HMRC, and pay tax.
But he is saying that he is not responsible to to pay tax as it is employer's responsibility to pay tax on employee's behalf and he is getting proper salary slips from employer which are showing that tax has been deducted everymonth. So his stand is that he will go in person with same salary slips and rest of the documents.
Now please guys you give your comments on:
if he go in person and give all those salary slips, will HO verfiy it with HMRC? Will they verify P60? do they have access to check P60s, and Salary slips?
if someone knows detail how HO to verifications please explain.
Best regards,

[linkers]

If they are giving him proper pay slips showing all tax deductions, then it’s not his problem anymore.

I don’t think so he will have any issue if he applies in person. Home Office can’t punish him if his employer has not submitted the tax to HMRC.

[muhammad.aftab]

Thanks Linker.... I have same approch like yours.
anyone else give their expert opinion please?

[Smam]

Hi

I do work as a Assistant Financial Controller in a Consultancy company and we deal with clients in making their tax payments and other tax related issues.

Most of the companies dont pay your tax on a monthly basis it goes with the group tax or so called collective tax as well to the HMRC and the HMRC match it from the company balance sheet in their current liabilities section.

Dont get me wrong having said that soo many companies hide their taxes as well but for your friend I must say that, that's none of his business at all if he's getting a correct payslip with all the right tax codes and NI and other deductions amount on it and futher more to it if its matching with your bank statement that's all about it. No need to worry, that's the employers business to deal with that with the HMRC.

[John]

The employer has to file a P35 PAYE end-of-year return. When doing so they will need to answer this question :-

2. Did you make any 'Free of tax' payments to any employee? In other
words, did you bear any of the tax yourself rather than deduct it from the
employee?

It will be interesting to see how they answer that question. Clearly they should have made the deductions that have been mentioned.

[muhammad.aftab]

Hi Smam
Thanks for your informative reply. quick question if CW will ask main applicant for P60s that what he will reply, As he is going with salary slips and bank statements plus company letter confirming his status and with his salary confirmation. shall he just tell that he don't have any?
and what if they check his NI or TAX with HMRC. can they check?

[John]

shall he just tell that he don't have any?

No, that would be a lie. And that is never recommended regarding visa applications. As they say, get caught in the lie, wave the visa goodbye!

I suggest he just hands over the documents, and see if the person picks up anything.

The point is that it is not illegal for the employer not to make the deductions. But what would amount to tax fraud is wrongly answering the Q2 that I highlighted.

[muhammad.aftab]

Thanks John you're so helpful.
Actully i was trying to ask that if he hand over all his documents like
Pay Slips, Bank statements, Employer letter and then CW request him that he would like to see P60 what he should answer?

[Smam]

Hi Mate,

To the best of my knowledge he must have to have the P60's other wise I dont understand which company your friend is working for in UK who dont even supply their employees with a P60 I just dont understand that. Your friend is working for that company for the past 5 years which is a quite long time preiod but its just not absorable by any one living and working in the UK that you dont have a single P60 from your employer in the past 5 years or so.

He should have to have the P60's with him. I know that its not an official requirements but if you have it its better.

Good luck for your friends ILR.

[John]

It is a legal requirement for an employer to issue a payslip each pay period, and also for a form P60 to be issued to each employee still in post on 5th April (or for a form P45 to be issued if they left during the tax year.)

[innocentdevil]

It is a legal requirement for an employer to issue a payslip each pay period, and also for a form P60 to be issued to each employee still in post on 5th April (or for a form P45 to be issued if they left during the tax year.)

another question John, will the employer furnish P60 only after paying the employee's tax to HMRC or do they just issue it and then sort it with HMRC

[John]

will the employer furnish P60 only after paying the employee's tax to HMRC or do they just issue it and then sort it with HMRC

Well strictly neither of those. That is, the software for preparing the P35 PAYE end-of-year return, either their own software, or HMRC's own software ...... that will prepare the P35 return and as part of that process P60s will be prepared for all employees.

That P35 return needs to be filed no later than 19th May after the end of the tax year. But even if that return is filed near that deadline, the tax/NI for month 12, for the month up to 5th April, should be paid over no later than 22nd April.

But the P35 could be filed very promptly, shortly after 5th April, in which case the return could be filed before all the tax/NI is paid over to HMRC.

Does that help?

[innocentdevil]

it certainly does. thanks a lot.