Problem with my Pay Slips for Teir 1 extension

[ref786]

Hi All,

I am quite worried regarding my Visa Extension (Tier 1 - General). At the minute, i am on Tier 1 general and extension is due on 5 december 2011 and gotta show 20K salary to meet the extension criteria. I am a software analyst and also work at petrol pump over weekends as a sales assiatant. To extend by visa, I need 20k and am showing 18.5 k from my professional job and 2.5k from petrol pump. I am meeting all the requirements but the only problem is with salary I get from petrol pump. The pay slips I get from petrol pump, dont show any tax and NI deduction. I met one solicitor he says, since no tax and NI have been taken from your salary of petrol pump, Its a matter to worry. Some of my friends say, its OK. I am quite worried as my whole career depends upon it. Could you guys help me out please?

Thanks

[Lucapooka]

Why are there no tax and NI deductions? It's illegal for your employer not to deduct these from your salary if you are indeed employed (even part time). Or are you earning below the thresholds and therefore are not eligible to pay?

[AccountantMatthew]

National Insurance-wise from what you have said, you won't pay any as you are below the earnings threshold.

However with PAYE as it is a second job, it is likely that you should be taxed at basic rate so 20% of what you earn is taxed. (This is only going on what you have said and usual HMRC arrangements however).

It's not worth giving any pointers to you if you have seen a solicitor as I don't want to confuse the situation. That said does your employer know that you have another job and did you fill in a P46 when you started (?) - they may think that you don't especially if they give you a payslip. If they did then your tax affairs will need to be ironed out as I'm sure you have been told.

[ref786]

Why are there no tax and NI deductions? It's illegal for your employer not to deduct these from your salary if you are indeed employed (even part time). Or are you earning below the thresholds and therefore are not eligible to pay?

Hi.
Thanks for your reply first of all. I already spoke to the petrol pump retailer and asked about it. He replied to me that I work just below 20 hrs a week so no tax and NI will be deducted, even I mentioned its my second job. but now I am paranoid if I show this income to home office if they will accept it for my visa extension? If they dont accept it, is there anyway, I can sort it out? I still got 2 months left.

Thanks,

[ref786]

National Insurance-wise from what you have said, you won't pay any as you are below the earnings threshold.

However with PAYE as it is a second job, it is likely that you should be taxed at basic rate so 20% of what you earn is taxed. (This is only going on what you have said and usual HMRC arrangements however).

It's not worth giving any pointers to you if you have seen a solicitor as I don't want to confuse the situation. That said does your employer know that you have another job and did you fill in a P46 when you started (?) - they may think that you don't especially if they give you a payslip. If they did then your tax affairs will need to be ironed out as I'm sure you have been told.

Hi,
My petrol pump retailer does know this is my second job that I just work over weekends. One day I spoke to him about it he said you work below 20 hrs so no tax and NI will be deducted. although, he pays me from companys account to my account and provides me pay slip. I can see on paylips the tax code is 747L and NI - A. my big worry is if i show the petrol pump salary and provide these pay slips when applying for tier 1 extension, will home office accept it? if they dont, what could i do to sort it out?

Thanks

[AccountantMatthew]

Thanks ref786. I can see what has happened ....

Your employer is wrong about the working under 20 hours rule as tax and NI is based on earnings rather than time worked.

However with a tax code of 747L no tax will be deducted as your income is lower than the tax threshold on that tax code (and your personal allowance). I therefore can't see any wrongdoing from your petrol pump employer purely in terms of the calculation of your pay from what you have said so far.

Where the problem potentially lies is that you probably have the same 747L tax code for your main job so will be receiving two personal allowances and, ultimately, underpaying your tax. With two jobs, you often end up receiving all of your allowances in one job and having none in your second job - although they can also split your allowances between the two.

With my clients I would normally advise that they speak to both of the employers about this (and keep them informed) and then also contact HMRC to explain the situation. Then basically do as HMRC says - they will advise you of what paperwork is required and eventually notify your employers with corrected tax codes and any tax owed will be adjusted through future pay packets. You'll soon know as you'll get less take home pay one month!

[ref786]

Thanks ref786. I can see what has happened ....

Your employer is wrong about the working under 20 hours rule as tax and NI is based on earnings rather than time worked.

However with a tax code of 747L no tax will be deducted as your income is lower than the tax threshold on that tax code (and your personal allowance). I therefore can't see any wrongdoing from your petrol pump employer purely in terms of the calculation of your pay from what you have said so far.

Where the problem potentially lies is that you probably have the same 747L tax code for your main job so will be receiving two personal allowances and, ultimately, underpaying your tax. With two jobs, you often end up receiving all of your allowances in one job and having none in your second job - although they can also split your allowances between the two.

With my clients I would normally advise that they speak to both of the employers about this (and keep them informed) and then also contact HMRC to explain the situation. Then basically do as HMRC says - they will advise you of what paperwork is required and eventually notify your employers with corrected tax codes and any tax owed will be adjusted through future pay packets. You'll soon know as you'll get less take home pay one month!

Thanks Matthew for this excellent explanation. Now I've got wht I have got to do to sort it out but I have still a big worry that is regarding my Tier 1 extension that is due in second week of november 2011 which is roughly 2 months later from now. I am showing the income of petrol pump from the month of march 2011 and its around 2.5k till now. As you suggested me, If i speak to my employers and HMRC, will they able to sort out the months from march? I had not thought that I would be in a trouble. I thought, if i was paying less tax, they would estimate the value and ask me to pay that. Could you suggest me any way out please?

Thanks,
Ref

[AccountantMatthew]

You're not in a unique position ref786 so don't worry!

Once HMRC issue tax code amendments to one or both employers, the employer will apply this to their payroll. You are taxed as you go along so your pay packet will adjust automatically when the employers do their payroll runs and you will have then paid any outstanding tax without having to do anything else. It just means that your net pay will be lower in the affected months.

[ref786]

You're not in a unique position ref786 so don't worry!

Once HMRC issue tax code amendments to one or both employers, the employer will apply this to their payroll. You are taxed as you go along so your pay packet will adjust automatically when the employers do their payroll runs and you will have then paid any outstanding tax without having to do anything else. It just means that your net pay will be lower in the affected months.

Thanks a lot Matthew. you took my stress off. Appreciated

[AccountantMatthew]

No worries Ref - hope it all goes well for you.