Anonymous #1
#1
Report Thread starter 2 months ago
#1
Hey guys.
My friend is working part-time at a shop in London. She receives wages cash in hand. We've read on the internet that receiving wages by cash in hand is legal in the UK. She also receives a payslip. However, she said that never deposited the wages in the bank in full. Since she had cash in hand, she sometimes used cash in buying or paying something and then deposit the rest into her account. So, the amount of the wages in the bank statement for few months is not matching with her payslips. She doubts if she gets a letter from the HMRC stating that where all those cash deposits came from, and then she says those are from her wages (but her wages amount in the payslip doesn't match with that in her bank statement). Do you think HMRC will agree to this? Any solution for this issue?
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RedGiant
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#2
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That isn’t an issue, as long as she is paying tax (either through PAYE or self assessment).
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Reue
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#3
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(Original post by Anonymous)
Hey guys.
My friend is working part-time at a shop in London. She receives wages cash in hand. We've read on the internet that receiving wages by cash in hand is legal in the UK. She also receives a payslip. However, she said that never deposited the wages in the bank in full. Since she had cash in hand, she sometimes used cash in buying or paying something and then deposit the rest into her account. So, the amount of the wages in the bank statement for few months is not matching with her payslips. She doubts if she gets a letter from the HMRC stating that where all those cash deposits came from, and then she says those are from her wages (but her wages amount in the payslip doesn't match with that in her bank statement). Do you think HMRC will agree to this? Any solution for this issue?
Being paid in cash is totally legal as long as relevant tax deductions are made or the person is doing so via self-assessment. If your friend is working at a shop I'd expect them to be on PAYE and for their employer to have made the tax deductions before handing over cash.
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IWMTom
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(Original post by Anonymous)
Hey guys.
My friend is working part-time at a shop in London. She receives wages cash in hand. We've read on the internet that receiving wages by cash in hand is legal in the UK. She also receives a payslip. However, she said that never deposited the wages in the bank in full. Since she had cash in hand, she sometimes used cash in buying or paying something and then deposit the rest into her account. So, the amount of the wages in the bank statement for few months is not matching with her payslips. She doubts if she gets a letter from the HMRC stating that where all those cash deposits came from, and then she says those are from her wages (but her wages amount in the payslip doesn't match with that in her bank statement). Do you think HMRC will agree to this? Any solution for this issue?
Does the payslip show tax deductions? Yes? No problem at all then.
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martin7
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(Original post by Anonymous)
Hey guys.
My friend is working part-time at a shop in London. She receives wages cash in hand. We've read on the internet that receiving wages by cash in hand is legal in the UK. She also receives a payslip. However, she said that never deposited the wages in the bank in full. Since she had cash in hand, she sometimes used cash in buying or paying something and then deposit the rest into her account. So, the amount of the wages in the bank statement for few months is not matching with her payslips. She doubts if she gets a letter from the HMRC stating that where all those cash deposits came from, and then she says those are from her wages (but her wages amount in the payslip doesn't match with that in her bank statement). Do you think HMRC will agree to this? Any solution for this issue?
It's not a problem.

If HMRC come asking (which is really very unlikely given the sums likely to be involved) she's got evidence of where the money has come from -- her payslips. And it's perfectly reasonable that she might spend some of her wages in cash and then pay the rest into a bank account.

A bank might conceivably ask questions, but again the payslips would explain what's happening.

But in reality, the sums involved from a part-time retail job are not going to give anyone any concerns.

If, on the other hand, she was depositing thousands of pounds in cash every week, then that probably would prompt questions at some point.
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Anonymous #1
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Report Thread starter 1 month ago
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(Original post by Reue)
Being paid in cash is totally legal as long as relevant tax deductions are made or the person is doing so via self-assessment. If your friend is working at a shop I'd expect them to be on PAYE and for their employer to have made the tax deductions before handing over cash.
Yes, the payslip shows tax and NI deductions. But, you recently said about the self-assessment (SA) tax return. I think the SA tax return is for the self-employed or those who have income from more than one source. Can an employee fill SA return if the deductions didn't make from PAYE? How? We thought SA return is for self-employed people. Very confusing.
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Reue
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#7
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(Original post by Anonymous)
Yes, the payslip shows tax and NI deductions. But, you recently said about the self-assessment (SA) tax return. I think the SA tax return is for the self-employed or those who have income from more than one source. Can an employee fill SA return if the deductions didn't make from PAYE? How? We thought SA return is for self-employed people. Very confusing.
SA is for anyone who may have a tax liability or overpayment, there are lots of different reasons for requiring one. Even someone who is fully in PAYE and has tax/ni deducted by employer may need to complete a SA such as if their pension is being deducted from net pay.
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Anonymous #1
#8
Report Thread starter 1 month ago
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(Original post by martin7)
It's not a problem.

If HMRC come asking (which is really very unlikely given the sums likely to be involved) she's got evidence of where the money has come from -- her payslips. And it's perfectly reasonable that she might spend some of her wages in cash and then pay the rest into a bank account.

A bank might conceivably ask questions, but again the payslips would explain what's happening.

But in reality, the sums involved from a part-time retail job are not going to give anyone any concerns.

If, on the other hand, she was depositing thousands of pounds in cash every week, then that probably would prompt questions at some point.
Hi martin7,
As you explained here that my friend has evidence of where the money has come from (i.e. her payslips). Don't you think HMRC could also think she may have got the money from somewhere else or could be from self-employed. We just have lots of doubts regarding cash in hand jobs. We are now afraid of HMRC.
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martin7
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(Original post by Anonymous)
Hi martin7,
As you explained here that my friend has evidence of where the money has come from (i.e. her payslips). Don't you think HMRC could also think she may have got the money from somewhere else or could be from self-employed. We just have lots of doubts regarding cash in hand jobs. We are now afraid of HMRC.
We're talking about a part-time job. I cannot imagine a scenario where HMRC would be concerned about that sort of money being paid in cash. And if for some reason they did ask, I can't imagine a scenario where showing the payslips wouldn't satisfy them.

It's perfectly reasonable for a small shop which takes payments in cash to use that cash to pay wages to its staff. If nothing else, it will reduce the amount of cash they need to pay into the bank -- and banks charge businesses for depositing cash.

You need to distinguish between the two meanings of being paid "cash in hand":

(1) people being paid in cash, with the payments being recorded in the accounts and all the taxes etc being accounted for and paid to HMRC
(2) people being paid in cash, with no records being kept, and no taxes etc being paid to HRMC.

If the employer is producing a pay slip (which they are required to do by law) then there's a very good chance they're also complying with the rest of the law.

If you're really concerned, then contact HMRC, describe the situation, and ask their advice.
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Anonymous #1
#10
Report Thread starter 1 month ago
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(Original post by martin7)
We're talking about a part-time job. I cannot imagine a scenario where HMRC would be concerned about that sort of money being paid in cash. And if for some reason they did ask, I can't imagine a scenario where showing the payslips wouldn't satisfy them.

It's perfectly reasonable for a small shop which takes payments in cash to use that cash to pay wages to its staff. If nothing else, it will reduce the amount of cash they need to pay into the bank -- and banks charge businesses for depositing cash.

You need to distinguish between the two meanings of being paid "cash in hand":

(1) people being paid in cash, with the payments being recorded in the accounts and all the taxes etc being accounted for and paid to HMRC
(2) people being paid in cash, with no records being kept, and no taxes etc being paid to HRMC.

If the employer is producing a pay slip (which they are required to do by law) then there's a very good chance they're also complying with the rest of the law.

If you're really concerned, then contact HMRC, describe the situation, and ask their advice.
martin7 Hi,
My friend also has other issues. The first issue is that she used to deposit some of her cash in hand wages few days after the payday. Which means the payday is not equal to the deposit day. The second issue is that she used to deposit her wages combinedly, for example, combining the wages of two-three weeks and then depositing those combined wages into the bank. But she used to get wages weekly (as per her payslips). Is this fine or not?
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IWMTom
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#11
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(Original post by Anonymous)
martin7 Hi,
My friend also has other issues. The first issue is that she used to deposit some of her cash in hand wages few days after the payday. Which means the payday is not equal to the deposit day. The second issue is that she used to deposit her wages combinedly, for example, combining the wages of two-three weeks and then depositing those combined wages into the bank. But she used to get wages weekly (as per her payslips). Is this fine or not?
Your "friend" needs to stop worrying.
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