Wage Manipulation

[pinkerton]

My son has worked a couple of shifts for a security company. The first shift was fifteen hours from 3.00pm on a Saturday until 6.00am on Sunday.When he received his payslip he had been paid a large proportion of the total amount as 'expenses' and only the remainder taxed. Even then, the gross total before tax did not add up to fifteen hours at the minimum wage. Can anyone tell me if this can possibly be legal, and will he later be liable to pay tax on the bogus 'expenses'?

[factor-fiction]

Does he work for them directly or is he employed through an agency/umbrella company?
There is a limit to how much can be paid as expenses since the amount net of expenses must exceed the minimum wage.

[pinkerton]

He works for them directly.

[factor-fiction]

Is it a well known company or some local small outfit?
Were the expenses specified? What are they for?
Was there any NI deducted?
There can't have been much tax, if any, due if it was minimum wage minus expenses.

[buildersmate]

Yes, it seems what the employer has done is unlawful and the reason for doing it (from the employer's point-of-view) could be because the employer doesn't incur an employer's NI contribution on expense sums.

I cannot see your son being liable for any comeback from HMRC - the employer gets the comeback. If he is having basic tax deduction and we are so close to the end of the current tax year, I take it he has earned enough to go over the threshold to earn an NI/pension 'credit' for this year? That's an important point if it would leave him under the threshold to trigger benefits/future pension.

Otherwise he could decide to leave the matter (since it actually avoids him in incurring cost too). Perhaps only consider this course of action if he works there on an occasional and temporary basis.

He could rightly say he didn't understand it - it is up to the employer to ensure this is done correctly

[tonywiltshire]

BM is correct as usual there is little chance of HMRC chasing you son and what the employer has done is possibly illegal. If he is over 21 years old he should be earning the minimum wage of £6.19 per hour, if he worked 15 hours the gross earnings should be £92.85, if he is only 18-20 years old the gross amount should be £74.70, if it is less than this ask his employer why and check his contract of employment which must be for at least the minimum wage if it is less the contract is illegal. If he has made a claim for expenses this should be in performance of his duties, from what you say he has not made such a claim.