Employee not registered as employee

My sister has gone into partnership and taken over a business. It seems now that they are eventually in that the wages being paid to the staff were "not above board" and I am helping to try to untangle the mess. We think that one of the employees is not even registered as an employee. She has said she doesn't think she is either. The "P45" we were given for her is just a list of the weeks she worked and the money she was paid, with no mention of PRSI, not to mind tax. We were supposed to have a meeting with the accountant today but he has been called away unexpectedly. I am just wondering what happens in this situation. We don't have an actual P45 to submit to get her Tax Deduction Card.

Where the employee does not have a P-45 from the previous employer

(a) you must commence tax on an emergency basis
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and

(b) you can apply for a TDC on form P46
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Before it is to late, your sister better check alot of other matters as well. Did she or her partner employ the services of an accountant prior to buying the business ? If the money hasn't been paid, I would suggest that they hold an amount back to pay due tax and prsi and i would say many other matters. This could be a costly exercise if they are not careful

Thanks for your replies. They did employ the services of both an accountant and a solicitor. The other party have lied about lots of things and have a useless solicitor. Only a deposit has been paid to date. There are lots of things to sort out. They will be withholding a fair amount of money I'd say! Luckily they have a good enough solicitor.

They need to be very carefull here.

Holding back money is one thing, but if the partnership owes significant amounts of tax to the Revenue then the amount of money held back could be less than the debt owed.

If they are sure that the people who sold lied and provided false information and if they feel the business sold to them was not as described (i.e. they have been defrauded) then they should consider backing out as soon as possible through legal channels. If they remain running the business while knowing of bad practice then they are weakening any case they might have against the vendor.

It may not be as bad as this, but then again it may. They really need to establish the extent of the bad practice and the financial exposure this leaves them in.

z

They'd best get an accountant to do a thorough audit before completing the purchase.

Any liability for tax arrears lies with the previous owners, regardless of whether the business has been sold in the meantime. Some of the above comments are therefore totally incorrect.

posted in error

It's been a while (a very long one) since I did partnership stuff so my memory may be a bit hazy, but regardless of that the fact still remains that if the previous owners have lied about material issues then the new owner would be well advised to put a lot of effort into establishing the exact situation on the ground and not rely on anything the previous owner had said.

If the business was a limited company. would the new owner not be liable for the debts owed by the company ? I know the original poster said it was a partnership, but someone who has an employee off the books might also be liable to say the business was a partnership of that suited their purposes. I know the buyers accountants should spot that kind of thing, but you might also expect them to spot someone being employed off the books.

My main point remains - the new owner should put a lot of effort into being absolutely clear about the state of the business as soon as possible.

z

zag said:

If the business was a limited company. would the new owner not be liable for the debts owed by the company ?

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If my aunt's name was Walter, she'd be my uncle

There is no mention or implication above that the person has bought a company.

My sister has gone into partnership and taken over a business.

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