Exit black market work

All work has to be taxed in the UK. This includes income tax, and National Insurance Contributions.

You can apply for a National Insurance number on the UK Government website. This is a free and relatively simple application, which you can make by yourself. Who pays tax and national insurance contributions for your work then depends on your employment status.

If you are a worker or employee, your employer should deduct the correct amount of tax from your wages and pay the HMRC directly.

Some employers choose to not declare their workers to the HMRC, to avoid paying Employers' National Insurance Contributions (a tax the government requires most businesses to pay for every worker they employ).

You can check if your employer has paid tax correctly by looking at your payslips. They should specify how much you earned (gross), and what was deducted. 

Ask your employer to

• Give you itemised payslips;
• Give you a written contract;
• Correctly deduct income tax and National Insurance contributions.

You are legally entitled to receive payslips and written terms of employment. If your employer refuses to give you your payslips, or if they insist on paying you in cash, you should seek legal advice.

If you are self-employed, paying tax is your responsibility, even if you pay an accountant to help. You have to keep track of your earnings and expenditure, complete an annual self-assessment with the HMRC, and pay the income tax and National Insurance contributions indicated.

Make sure you:

• Register as self-employed with the HMRC and get a Unique Taxpayer Reference (UTR) number.
• Keep written records of your business expenses;
• Provide written invoices to your clients;
• Declare all earnings to the HMRC and pay the tax bill issued to you;
• If you use an accountant, make sure they are suitably qualified.

If you are a migrant to the UK, your immigration status (or leave) specifies whether you have a right to work, and if there are any restrictions. For instance, there may be restrictions on where you are allowed to work, and the number of hours you can work per week. It will also specify if your right to work has an expiry date.

It is your responsibility to understand and comply with the conditions of your visa (or leave).

You can find out if you have the right to work and under what conditions by:

• Using the UK Government’s Prove your Right to Work website.
• Checking your immigration documents from the Home Office

Either of these documents can be used to demonstrate your right to work with a prospective employer.

Being paid in cash is not illegal. If you are self-employed, you will have to declare this income to HMRC and ensure the tax bill is paid.

If you are a worker, being paid in cash (or a mix with cash) is a red flag. Always ask your employer for an itemised payslip, and access your HMRC Personal Tax Account to check if your work was correctly declared and taxed.

Exploitation

Bad employers prey on people who feel they have done something wrong. Knowing that you may struggle to report them, they may ask you to work long hours, for little to no pay, in unsafe conditions. They may also force you to break the law, to make you feel like you could never report them again, and bring you further under their control.

The UK Government offers protection to victims of exploitation. If you were exploited, contact the Modern Slavery Helpline. You can also contact our team to speak to an immigration and employment adviser.

Breaching the conditions of your immigration status

If you require permission to work in the UK, working illegally is a criminal offence which can have serious consequences. If you are intercepted by immigration enforcement, you may be prosecuted, and be asked to leave the UK. This can also affect any future applications for immigration status you make, as well as affect the status of any family members whose status in the UK depends on yours.

If you are unsure of your immigration status and your right to work, speak to an immigration adviser.

Losing access to a pension

A state pension is only available to individuals who have paid National Insurance contributions for a sufficient number of years. Without a track record of paying NI you risk losing access to your state pension.

To see your track record of employment and tax contributions, log in to your HMRC Personal Tax Account.

You may also be able to make voluntary contributions to plug any gaps in your record and ensure you don’t lose access to your pension. Contact the HMRC for advice.

Losing access to benefits

Some welfare benefits in the UK are only available to people who worked, or who have a history of working. Without a track record of paying NI, you may miss out on access to these benefits.

Fines

If you are found to have deliberately not paid tax, the HMRC can fine you or deduct the payment directly from your bank account. Should you be unable to cover the costs of fines, the HMRC may take steps to send bailiffs that will collect your possessions instead.