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View Full Version : No Umbrella company has sent my P45 to HMRC!



kevblimey
18th December 2012, 10:47
I am not going into the detail of why, it really would take too long. However it has come to my attention from a query to my tax office, that none of the umbrella companies I have used actually sent the P45 to HMRC when sending me my P45. The Tax office tell me there is a legal requirement to do so. They also tell me the only way it doesnt have to be sent is if you stay on the umbrella companies books as an employee. I have never left any umbrella company thinking that termination of my association with them in any way was final.

Is this legal, when you the contractor, have no idea, and would never have any idea it hasnt been sent unless the P45 form/info they should have sent in was required?

Thanks in advance

PayMatters
19th December 2012, 10:11
Yes you are correct you have to tell the umbrella company that you have left if you want them to issue a P45.

nlg
25th January 2013, 14:37
Same with me, even though I officially left them. In 2010-2011 I changed umbrella companies 3 times in the same tax year, and used a p46 with each of them when I joined as I did not yet have the p45, this has resulted in 10k underpaid tax which I now have to pay back!! Very nasty

LisaContractorUmbrella
25th January 2013, 16:19
You have to remember that you are an employee of the umbrella company and therefore the same rules apply as with any other employment. You wouldn't just walk out of a permie job without telling them would you :tongue

CWCUmbrella
26th January 2013, 20:37
Kev,

The problem is that the majority of umbrella companies do not use HMRC approved payroll software. In order to perform the required calculations they often use bespoke software, which cannot 'talk' to HMRC the way that genuine payroll software can.

I have run an umbrella company since 1999 and as the other poster in this thread stated, an umbrella company is just like any other employer and is duty bound to issue a P45 when you inform the company that you are no longer employed, or need their payment service.

We have always used HMRC approved software for our umbrella employees, and even pay our own staff using the same payroll system as direct employees. It is so simple to send a P45, it's literally a click of a button. The P45 can nowadays even be printed in pdf so it can be emailed to you.

So if your P45 has not been received by HMRC, this is entirely the fault of the umbrella companies involved.

I have always offered a little service on the side, I do it for free because I am concerned about the hundreds of thousands of subcontractors that have had their tax and NI records ruined by this sort of thing going on.

I used to be an HMRC Inspector and that has left me with the ability to unpick any payslip to find out exactly how a payment has been handled.

Back in the day, if a taxpayer could produce a payslip showing any PAYE deductions, HMRC had to allocate those amounts to the taxpayer's records whether or not the employer paid HMRC.

However, HMRC nowadays believes that when any taxpayer signs up to a scheme some of which promise 90% take home pay or whatever, that there is an awareness that tax and NI is not being paid.

Unbeknown to you, it could actually be that the deductions that you took to be PAYE deductions, were actually the umbrella company fees, and if this is the case, you have been had and HMRC will not look favourably on your case. (I've seen this happen a lot of times I am afraid to say - if on your payslip, you see 'deduction' and 'NI' rather than 'PAYE' and 'NI', it's usually a sign that no tax is being deducted. You can check by looking at the tax paid to date figure. If that is at zero, or is not present, you have problems.)

If you, or anyone else, would like to send a copy of your payslips (black out your details if you wish) - I will tell you whether you had been paid through a legitimate scheme. If I think there is a chance of getting HMRC to play ball, I will write a letter to HMRC on your behalf.

No-one can be blamed for falling foul of this kind of thing, HMRC steadfastly refuse to identify which umbrella companies are not even registered as employers, or which ones use HMRC approved software, so that workers using PAYE umbrella companies can feel safe. This is because behind the scenes HMRC are taking these companies down for millions. Once they have gone, they have no responsibility to the workers that they paid. But they simply spring up again under a slightly different guise, such is the money to be made.

I am sorry to give such a gloomy outlook to your problem, but believe me Kev, if I can help, I certainly will. Send me an email, I will respond to everyone. Carolyn Walsh