Cash in Hand ?

[Pablo74]

Hello,
Just to update you, she does get a payslip but the payrise in not included. It is just in cash with the slip.
What should she do ?
Pablo

 

[FredBloggs]

While posters here mqaight argue the who would be held to blame for this undeclared income the practical answer is if she does anything she will in all probability loose her job - even if this doesn't happen immediately her life there could be made pretty unbearable. Even if she got an unfair dismisal award she would still have lost her job. so she should only tackle this if she's confident that she could pick up another job.

I also think the employer is being very stupid. He's obviously doing this to more employees than her and all it takes is one disgruntled employee and he could be in trouble.

 

[shipibo]

Wrong again. The employer is legally obliged to process BIK tax and PRSI/health levy deductions at source (via payroll) on any benefits to which it applies and to pay them net of these deductions. It is not allowed for them to pay them gross and leave it to the employee to declare them. On the other hand if this happens the onus is still on the employee to declare them.

That was point I was making, not very well though.

Just a hole in the company accounts which the accountants/auditors should spot?

payrise, not a lot of money ....

 

[ClubMan]

Hello,
Just to update you, she does get a payslip but the payrise in not included. It is just in cash with the slip.
What should she do ?
Pablo

She should declare the additional income to ensure that her personal tax affairs are completely legit and up to date. She may want to consider looking for a job with a more reputable employer whether or not FredBloggs' analysis is accurate in this case.

 

[FredBloggs]

I agree with Clubman. Any employer in this day and age who engages in under the counter practices is both stupid and disreputable. I can understand why this was done when tax rates on companies were penal but now that they're not there is no reason why an employer should do so. any money saved on employers prsi is negligable and it also creates false expectations amongst employees for future pay rises.

 

[Joe1234]

Generally the company will raise dummy invoices from a fake company outside Ireland so as not to create a VAT fraud element, "pay" this company with a cheque made out to cash and just cash the cheque and pay the staff under the table.

Will easily be spotted in the event of a revenue audit if the revenue auditor asks for a copy of the cheque.

 

[ClubMan]

Shouldn't it also be caught if/when the company itself has its own accounts audited?

 

[Joe1234]

Shouldn't it also be caught if/when the company itself has its own accounts audited?

Possibly. The company's auditor may not go that deep. Revenue may suspect something that the company's auditor may not know about. Revenue could carry out an audit based on information they may have uncovered as a result of an audit of someone else.

 

[ClubMan]

OK - thanks for that info.

 

[Thrifty]

I think really the wage slip needs to be considered first. As long as the addition is added in there there should be no problem. Employer could be paying cash in hand for the present simply because he just hasn't altered the DD/ pay out from the bank.

 

[moondance]

Shouldn't it also be caught if/when the company itself has its own accounts audited?

Depends - if the company itself is getting paid "cash" for some jobs it does and then pays employee the extra from this cash then there is no paper trail. People are definitely still getting away with this and I'd guess it's widespread. The amount of traders I've had doing work suggesting I pay cash is quite amazing!

 

[Purple]

The employer may be paying the wages out of their own pocket and then making bogus expenses claims (mileage etc) to recover the cosy from the company without incurring taxes. Either way it is dishonest and while the employee is in a very difficult position they are still facilitating tax evasion.