Receiving "cash in hand" payments as an employee

[laurakate]

Could really do with an answer on this as I'd like to make a decision fairly soon (need to get back to someone today)

I've got a potential job offer of 5 pound an hour (I'm 23!!!) and it sounds like cash in hand.

Surely I need to be paid minimum wage and to have a payment structure where my national insurance etc is taken into account so that everyone knows where everyone stands and I don't have to worry about informing the tax man etc myself?

I've posted so many posts recently asking if potential employers are being dodgy that I fear people will think I'm either a troll, overly fussy or maybe, just very keen to protect myself.

Help!! (the urgency is derived from me liking the look of the job once all the red tape has been dealt with)

 

[laurakate]

ooh wait, i think i might have answered my own question as i've just found this...

Cash In Hand - Vacancies Online

I've heard that cash in hand does happen in the beauty industry though with regards to how employers pay employees who are working for them...so is this really illegal?! :suprised: I think I'm further answering my own question in how I personally wouldn't be happy with it but I've heard of it happening.

so i guess this means that there's an absolute line drawn between employed and self employed and anyone who tries to place someone somewhere in between is doing it wrong?

ETA: the following is also a helpful link if anyone else has similar questions about this:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10010537

 

[bloomingnails]

No I would not take it, for lots of reasons. You'll have no employment rights, you should be paying into the system and so should your employers. No contract etc. What's the job for? You could take it on a self employed basis and register for tax, NI etc yourself, just a thought, you would still need some sort of contract. However £5 ph is not enough for even a cleaning job for example. Hope this helps.

Sent from my HTC Sensation Z710e using SalonGeek

 

[TracyS]

The minimum wage for your age is, I think, about £5.93 an hour so at a fiver it does sound like cash in hand.

The problem you have with that is that you're potentially a) loosing your NI contributions b) receiving less than you should c) possibly breaking the law. I'm no expert on employment law by any stretch but I think it is your responsibility to ensure your NI/Tax is being paid.

You may also find yourself on a pretty sticky wicket if it went pear shaped with the job in terms of employment laws - if you're not a 'through the books' employee then I honestly don't know if you would have the same rights.

Doesn't sound like a good offer to me unless you know one way or the other if you're employed in all the correct senses

 

[MissLou]

Hey, it sounds a tad dodgy to me. If you get paid cash in hand it's then your responsibility to inform the tax man unless your employer has you on their books as employed. In saying that £5 an hr is illegal for your age. If ur keen on the job I would tell them u want the national legal wage and that they put you on their books. If u make this clear they'll know from the off they can't take advantage of u and also if they kick up a fuss about it u know not to take the job as it shows ull have nothing but trouble from them. I have worked for dodgy salons in the past, going from my experience I'd say this is the best way forward. Good luck

 

[laurakate]

cheers for the speedy replies ladies...this is the third time where I've had to check the employer is doing things by the book when seeking employment...I find this very worrying.

I will persue the job and then embrace or disregard based on whether it is all official and above board or not...it would really stress me out not having any rights/breaking the law/having no proof of earnings etc.

thanks again

 

[laurakate]

righto so I've just phoned her to say yes I'm interested but cash in hand and lack of contract isn't going to work...she told me that she wants to do it this way because it would be a trial period and she's tierd of training people up only for them to leave after a period...OMG I am so so sick of people banding the word "trial period" about as a means of dodging what is ultimately the law!!!

I've told her the facts and she says she'll get back to me...is it me or do you think there's a reason that there's a high staff turnover....this is exactly what it looked like when I turned down another "opportunity" recently where the guy was getting me to work on numerous paid clients in a day and trying to call it a trade test or interview.

The job itself looks good, again, good products, good services, nice location, nice hours but am I right to be worried?!

I'll wait for her to get back to me but in the mean time I'm wondering if I should persue this becase it worries me that I might be working for people who either a) don't know what they're doing or b) have an ulterior motive...like I don't want to put myself in a vulnerable position when I don't have to.

It's a tough one because a nice little Saturday job would be a great starting point for me (for what it's worth I value experience over getting minted lol)

What are your thoughts?

 

[laurakate]

Today I've been offered another job where I'm classed as an employee but paid cash in hand. I was told that I will have to pay my own NI and tax upon recieving the cash as an employee.

Does anyone employ anyone legally these days? I am finding that as a recently qualified person who is looking for employment, the jobs where employers do everything by the book are very hard to get and then when I am offered "employment" it is always cash in hand and sometimes below the minimum wage.

Help help help help help! Self employment is not an option for me and this is getting desperate.

I am taking steps to improve my situation by looking for work in other parts of the country (I am currently based in Manchester but looking for work in Northampton and Milton Keynes as Manchester isn't prooving to be very fruitful and I am able to move to the other two places immediately should the situation be any better there).

If anyone can give me any hints/tips etc regarding how to search for and obtain employment where I am paid legally etc then I would be eternally grateful!!!

 

[albarn]

hi, just wanted to say check with your local tax office before you accept, i have run buisnesses and have paid cash to workers because this is allowed as long as its the correct min wage and the problem is if you earn under the ni and tax threshold your employer can pay you by any means they wish and it is legal as long as you are employed legally. As long as you fill in a p46 if you have no p45 you will be ok. My workers always filled in correct forms etc, make sure you bring the subject of holiday pay with them as part time or full time all employees are entitled to 5.6 weeks per year.

 

[persianista]

The problem is epidemic in our industry, partly driven by employees.
So many times I have had potential employees ask if they can be paid cash in hand, as they dont want to pay tax or ni.
I cannot compete salary wise with salons who pay CIH as I have to factor in the cost of 28 days hols and employers NI.
Just report those salons to HMRC, and this practice will get stamped out.

 

[sophiegees]

The minimum wage for over 21 years is now 6.08.

xx

 

[Cheshire_Gal]

The problem is epidemic in our industry, partly driven by employees.
So many times I have had potential employees ask if they can be paid cash in hand, as they dont want to pay tax or ni.
I cannot compete salary wise with salons who pay CIH as I have to factor in the cost of 28 days hols and employers NI.
Just report those salons to HMRC, and this practice will get stamped out.

The reason being that they dont want anyone knowing they are working as they are probably claiming some kind of benefit, usually with the benefit being as lucrative as the work. We as humans are just greedy and always wanting more. We dont live within our means, hence the need to get extra cash where possible.

 

[Becki2003]

Hi, you cant possible work for £5 per hour at 23 your employer is being illegal. But as for being paid in cash, you can actually pay your staff by any means you choose as long as you are registered as an employer with HMRC, pay correct minimum wage for age, take correct tax and NI, pay correct employers NI contributions and provide your staff member with a wage slip every time and a P60 at year end. I use wage envelopes to pay my staff cash weekly. You must however ensure that the last part of their P45 is filed with HMRC or they have filled in a P46. I wouldn't bother about the ones that are breaking the rules tbh, the tax man will always find them eventually. Minimum wage was introduced for a reason and that is to protect the employee from being exploited. My advice? Don't do it, don't cheapen your skills by thinking this is acceptable. Good luck xx

 

[Ruth Mills]

The minimum wage for people 21 and above is now £6.08 per hour - The National Minimum Wage rates : Directgov - Employment

Anyone paying less than minimum wage (and cash in hand to boot) is breaking the law though; as other people have said, as well as swindling the tax man (and swindling you by paying you less than the minimum the law says you should be getting), they are also operating at an unfair advantage compared with salons who do everything by the book in terms of their tax affairs.

I'm all for shopping them to HMRC too... in an age when the Government think it right to steal benefits from disabled people who need them (which is beyond the pale, if you ask me), it's *so* unfair that businesses are getting away with paying less than their fair share of tax!

 

[staceymackey]

If a person ever wants to get credit for a car, house or business they are going to need to show income history. People trying to dodge the system and "get ahead" end up keeping themselves on benefits and are shooting themselves in the foot! This mentality is ridiculous!

And that goes for business owners too. When you want to sell your business buyers are going to want to have their accountant look over your books. You want to show a busy salon needing to employ x therapists and turning over x-huge amount.

Anyone doing this should seriously reconsider it.

 

[Ruth Mills]

If a person ever wants to get credit for a car, house or business they are going to need to show income history. People trying to dodge the system and "get ahead" end up keeping themselves on benefits and are shooting themselves in the foot! This mentality is ridiculous!

And that goes for business owners too. When you want to sell your business buyers are going to want to have their accountant look over your books. You want to show a busy salon needing to employ x therapists and turning over x-huge amount.

Anyone doing this should seriously reconsider it.

Very well said! Banks will want to see payslips as evidence of income if you are employed and want to get a loan or mortgage or whatever. Also, a darned good point about benefits too - it's really unfair if people are claiming benefits and doing "cash in hand" work like that as it means there's less money left for the people who *really* need it!

As a business owner myself, I'm always paranoid about making sure that everything is absolutely kosher and above board; in the unlikely event of a tax investigation, it really is the safest place to be!

 

[laurakate]

The thing I was offered most recently was just over minimum wage but I was told it was cash in hand and that it was my job as en employee to pay the tax and NI myself. I was told I was being offered just over min wage to cover the fact that i'd have to pay my own Ni and tax. Not impressed!

It's just too messy...as others have said, having no proof of earnings is a problem re applying for things (credit, loans etc), you'll get no holiday pay, no p45, student debt won't get repaid, you have no proof of your so-called employment should it be required. Urgh! just, NO!

I am aware of the fact that you COULD declare yourself as self employed so that you were at least declaring your income to somebody but I just can't justify putting myself in that situation to be honest because it would be likely that I would have to pay for a session with an accountant in order to get the paperwork sorted and I wouldn't have to do this if the person claiming to employ me was doing their job properly.

So disillusioned to be honest. I think I've mentioned on here before that as a recently qualified person, the jobs where you are employed legally are very hard to get (in my experience they tend to want the more experienced therapists) and every single job that I have been offered has not been a legal means of employment re getting paid properly. Frankly, I think it's disgusting and people should be ashamed of themselves :evil:

 

[Ruth Mills]

The thing I was offered most recently was just over minimum wage but I was told it was cash in hand and that it was my job as en employee to pay the tax and NI myself. I was told I was being offered just over min wage to cover the fact that i'd have to pay my own Ni and tax. Not impressed!

That's bullsh*t! Employees should be on a proper payroll and have tax and NI deducted by their employer as PAYE.

Only self-employed people should have to manage the tax and NI themselves!

 

[Cheshire_Gal]

I think that if youre classed as an apprentice, then the min wage doesnt come into it and they can pay you what they want. I dont think its a particularly good time for anyone new trying to get into this industry. With the current recession luxuries are the first thing that will go, as money is tight at the moment. Anyone wanting to employ someone will be hoping they have an existing client base, or something else that can add value to the business. Also there are so many new therapists. Its a tough time.

 

[laurakate]

That's bullsh*t! Employees should be on a proper payroll and have tax and NI deducted by their employer as PAYE.

Only self-employed people should have to manage the tax and NI themselves!

Cheers Ruth The way she phrased it really got up my nose too...like she made it sound like it was a really good and convincing deal. I'm starting to wonder if some people run their businesses by preying on people who they think are stupid because if I didn't know any better, I might be foolish enough to fall for it and the sad thing is that I bet there are people who DO fall for it and then it puts them in a potentially vulnerable position

Thanks again for your support guys...I'm looking for work out of Manchester now because I'm starting to think that there's some correlation between the illegal offers I've had and the fact that many salons seem to come and go so rapidly here. I'm gonna start to look for work in areas where their salons have been running for longer. This could be a flawed theory but I do have a bit of a hunch to be honest!