Tax liability as employer did not pay my tax

W

Williams

Guest
Hi,

I worked for a guy for a few years up to the end of 2005 when I registered for income tax and became self employed. I applied on line before xmas for a P21 for 2005 and it came back that i owe the circa €2,000 for that year. I made a vat return for Nov/Dec '09 and revenue wont refund me as they put it against this liability. If I hadn't applied for the P21 they wouldn't have noticed.

Anyway, my query is. My former employer did not pay enough tax for me in 2005 and now I have been saddled with the liability. Have I any case with the revenue to have this wiped or transferred to my former employer. His companies have gone bust sinve. I am very annoyed about it because I am out of work now and that guy owes me €7k for work in 2007 that i will never see either.

I appreciate any advice offered.
 
Williams said:
Hi,

I worked for a guy for a few years up to the end of 2005 when I registered for income tax and became self employed. I applied on line before xmas for a P21 for 2005 and it came back that i owe the circa €2,000 for that year. I made a vat return for Nov/Dec '09 and revenue wont refund me as they put it against this liability. If I hadn't applied for the P21 they wouldn't have noticed.

Anyway, my query is. My former employer did not pay enough tax for me in 2005 and now I have been saddled with the liability. Have I any case with the revenue to have this wiped or transferred to my former employer. His companies have gone bust sinve. I am very annoyed about it because I am out of work now and that guy owes me €7k for work in 2007 that i will never see either.

I appreciate any advice offered.
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I dont think you would have any case.

If he under taxed you- bascially you would got more in your pay packet than you should have got.

as he is now gone out of business- little you can do.

I cant see revenue wiping it either.

all you can do is agree repayment schedule and offest any vat refunds against it
 
Hi,

Thanks for replying. I am a carpenter and in the building trade you usually Agree a net figure with the boss and he pays you that every week. Its up to him to pay the tax. He obviously did not do that so he has left me in the soup. It's a really sore one. I am due a refund re '09 but that is all wiped. If I hadn't registered with PAye Anytime I reckon this would never have came up.
 
i would suggest that you can a copy of what made up your standard cut off point and credits in 2005(this is where your employer worked off normally)- compare it to assessment to make sure all credits on cert were also claimed on p21.

was paye credit claimed, were you single/married, rent credit etc
 
is it that the former employer didn't deduct the correct tax from you or that he didn't forward it on to revenue.

In the case where employer didn't deduct correct tax its kinda tough luck. Did the employer use the correct tax credits and cut off as supplied on the Tax Certificate provided by the tax office at start of working for him, or was the Tax Cert incorrect and the employer would have no way of knowing that the cert wasn't correct. The onus is on any employee to ensure that their employer is using the correct figures. for example - if your tax credits are 123p/w and the employer incorrectly puts that in as 213e, its up to the employee to notice it and correct it. Responsibility actually rests on the employee to get it right. Even with net pay thats common in construction industry, it is still your own responsibility to ensure correct amounts are deducted.

In the case where the correct amounts were deducted from you but they weren't forwarded to Revenue, then you might have a case with revenue.
 
It seems that prior to 2005 OP worked cash in hand as an employee and registered as a sub-contractor after that. The employer / main contractor failed to make adequate or any returns and it seems OP has no paper trail to protect him from the Revenue demands of under-payment.
 
OP doesn't say he worked for cash in hand, he says he worked on Net Pay - common in construction in the past but not as much now. Employee agrees receive a set amount each week and the employer pays tax and prsi due. Payslip would have the true Gross/Net figures on it though. Its a bad method for the employer as the employee might have a very low credits or give all their credits to wife/husband, and leaves the employer open to a very high tax liability for the employee. Seen it happen a few times where employer ended up paying more tax/prsi than he had calculated on originally.
 
Johnboy45 said:
OP doesn't say he worked for cash in hand, he says he worked on Net Pay - common in construction in the past ...
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I know he didn't say that - I did, but it's a matter of semantics anyway as it amounts to the same thing. Nobody knew or cared much about pay-slips, tax ,PRSI or P60's until a situation such as OP now finds himself in arises, years later.
 
If the OP had worked cash in hand, then there wouldn't be a liability arising for 2005 so that's not relevant.

This nett to gross system more often than not costs the employer additional money. Time and again I've seen an agreement to pay a nett of €xxx and then the employee announces that their partner has most of the tax credits.
As previously mentioned, responsibility for correct payment of tax rests with the individual - not an employer. An employer cannot be expected to know every detail of your personal circumstances.
When I got my first ever job as a teen my father sat me down with a pen and paper and showed me how to calculate my taxes. It's even easier now - just google 'tax calculator' so there is no excuse for not knowing if you are compliant or not. (Admittedly - I no longer use the pen and paper method myself!!:D)
To the OP - double check that you have claimed all your entitlements for that year as understated credits could be the reason for the liability. It is a sizeable amount for an underpayment and that amount doesn't represent the usual credits for the time. Perhaps ask someone to calculate your taxes for that year.
If you want help with that, feel free to PM the figures to me.
 
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