Illegal practices in the workplace can result in ‘serious penalties’

Both employers and employees in SMEs can face 'serious penalties' for engaging in illegal practices in the workplace, according to employment law specialists.

Steeles Law said it is the employer’s responsibility to deduct Pay As You Earn and National Insurance contributions from wages and pay them to the Inland Revenue.

Alison Davies, an associate in the London employment and immigration team of Steeles Law, says: ‘It is a criminal offence not to pay National Insurance contributions within the time allowed for payment. The penalty for employers is that on summary conviction there can be a fine of up to £1,000.’

He added that an employee who deliberately cooperates in an illegal arrangement with the employer to evade payment commits a separate offence.

Yet according to the National Audit Office, there are no reliable and practical methods to assess the scale of income concealed by taxpayers, or to assess the scale of unknown activity within the informal economy.

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