What should UK visa holders do if their employer fails to pay tax and pension contributions?

The 22nd of the following month is the usual deadline for pension contributions.

The UK Government’s guidance on workplace pensions states that personal contributions deducted from wages must normally be paid electronically into the scheme by the 22nd of the following month, or by the 19th if paid by cheque. If you discover that the deductions do not match the records, you can address the issue in two ways, depending on the relevant statutory obligation: ‘Pension’ relates to pension contributions; ‘PAYE’ (Pay As You Earn) relates to reporting and paying tax to HMRC. This article discusses the standard employment scenario where pay is processed via a payroll system.

In my view, when has already been debited but the record is missing, one should first verify the details and request a correction; it is not advisable to make a second payment oneself simply to complete the record.

If your pension payment has not been received, please check the payment schedule first

First, request a detailed record of each individual contribution from your pension provider and compare it month by month with your payslips to distinguish between personal deductions, employer contributions and tax relief; do not simply subtract the total account balance from the amount deducted from your salary. The UK Government’s guide *Occupational Pensions: What Employers Can and Cannot Do* also highlights an arrangement that is easily overlooked: the first contribution following automatic enrolment may, where the scheme permits, be consolidated and paid on the 22nd of the fourth month. Contributions made by the employer, however, are paid on the dates agreed with the scheme. When carrying out your checks, you may request the enrolment notification, payment schedule and details of any months with outstanding payments to confirm whether the payment is simply not yet due, has been remitted but is pending allocation, or whether there has indeed been an underpayment.

If you have confirmed that payment is overdue, write to the payroll department specifying which months’ payments are missing and the amount outstanding for each, requesting a written reply stating the date by which the arrears will be paid, and keep a copy of their reply.

Once the gap has been confirmed, who should be held accountable?

The Pensions Regulator (TPR) requires, on its shortfall reporting page, that general shortfalls be reported after a 90-day waiting period; persistent late payments and employers’ refusal to make contributions are also reportable matters. This reporting waiting period does not extend the deadline for payment. When submitting the report, please have the employer’s name, address, PAYE number, the months in arrears and the amounts owed to hand, and attach payslips and contribution records; the number can usually be found on payslips or P60 forms.

If the pension provider has already informed you that it has reported to the TPR, the official guidance states that there is no need to resubmit the report.

Where individual losses remain unresolved, you may, after completing the relevant formal complaints procedure, lodge a complaint with The Pensions Ombudsman, who will examine the issue of outstanding contributions and related losses. In your claim, please specify which contributions you wish to have made up and which investment losses you wish to have accounted for; whether compensation is warranted and the specific amount will be determined on a case-by-case basis.

If there are gaps in the tax records, check the tax returns first

With regard to tax, the process involves checking your HMRC personal tax account for details of your employer, salary, income tax deducted and tax code; NI (National Insurance) annual records are checked separately. The absence of records in your account does not in itself prove that your employer has failed to pay tax; it may also relate to issues with tax returns or data matching. You can compile your payslips, bank statements showing actual salary payments, your P60 (which details annual income and tax paid), and the P45 you received upon leaving your job, and highlight any discrepancies on a month-by-month basis. The UK Government’s NI enquiry guide displays contribution records by tax year; it is not suitable for determining whether contributions for a specific month have been paid. To check current payroll tax payments, you should cross-reference the relevant PAYE records.

If there are discrepancies in the information, please ask the payroll department to check and correct the declaration; if the issue remains unresolved, submit evidence to HMRC requesting them to review the tax and NI records, and keep a record of the reference number.

If you receive a notice to pay additional tax, you should also clarify who is liable

Where tax has already been deducted from your wages, you must explicitly request HMRC to verify the amount of tax deducted; a blank account balance does not, on its own, constitute proof that a repeat payment is required. If the employer has failed to deduct the correct amount of tax in accordance with PAYE rules, HMRC guidance ‘PAYE90020’ states that the tax should normally be recovered from the employer; where the conditions are met, HMRC may issue a PAYE direction, transferring the corresponding liability to the employee. Tax shortfalls arising from tax being withheld but not paid, under-withholding, or other causes must be verified separately. Upon receipt of a formal notice, you must still respond within the timeframe specified in the notice, setting out the grounds for dispute and requesting the basis for the calculation; the fact that the employer is auditing their accounts does not automatically suspend the relevant time limits.

Once you have received a written response regarding the back payment or correction, check the actual amount of pension received against HMRC’s updated records. Any months that do not yet match should remain on the pending list.

This article is for information purposes only; please consult a qualified solicitor regarding specific matters.

[Sources] UK Government, ‘Occupational Pensions: What Employers Can and Cannot Do’; TPR, ‘Report on Missing Occupational Pension Contributions’; HMRC, ‘PAYE90020: Under-deduction of tax and liability transfer decisions’.

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