What´s meant "Cash-in-hand work"?

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Working cash-in-hand, or ‘under the table’, means that the work you do won’t appear on your employer’s books.


Some employers like this arrangement because it means they pay less tax and avoid paying WorkCover Claims premiums.
This might seem like the perfect way to earn some easy money, but think about it carefully before you do it.


If you work cash in hand, you won't pay tax on the income you earn. If you’re on Youth Allowance or the dole, you probably won’t declare your income to Centrelink.
Keep in mind that this is illegal and can attract serious penalties, including imprisonment.


If you do not get paid, or get paid much less than you expected, you can apply for wage recovery through the Office of Workplace Services but it may be difficult proving what you are owed considering you don’t officially exist on your employer’s books.
Also, if you do manage to recover some money through this process you will still have to pay tax.
This is because it is illegal to work and not pay tax and you might be fined and/or prosecuted by the Australian Taxation Office if you do so.

Workplace injuries and WorkCover claims

The Victorian WorkCover Authority looks after people are who injured in the workplace or as a direct result of the work they do. It provides some financial compensation for medical costs and for time taken off work.


You can only get WorkCover compensation if your injury or disease has been the result of your employment. If you have a work-related injury or illness, report it to your supervisor at once. See a doctor, and keep a record of all the symptoms you’re experiencing. Fill out a claim form, which you’ll need to give to your employer.





WorkCover advertises itself as being about ‘getting you back to work as soon as possible’. For some injured workers, it can be a frustratingly bureaucratic process. If you’re a union member, it can be a good idea to contact your union to help you through the process. Employers have insurance companies whose job is to investigate and question your fitness or unfitness to work. This can be intrusive and intimidating. Find a doctor you can trust and keep good records.


Find out more:

• Victorian WorkCover Authority website
• Victorian Trades Hall Council’s OH&S website

For UK - Money, Tax and Benefits

Tax on casual, part-time or temporary work

If you work part-time or on a casual or temporary basis you must pay Income Tax and National Insurance (NI) if you earn more than £5,225 per annum. This applies whether you are employed or self employed.


- If you work for an employer
- If you're employed on a casual, temporary or part-time basis by law your employer must:

• deduct tax and NICs from your wages
• give you payslips
• deduct student loan repayments, if relevant
• give you a form P45 when you leave
• give you a P60 tax summary at the end of each tax year

What about 'cash in hand'?

It's illegal for your employer to pay you 'cash in hand' without deducting tax and NICs from your wages.


If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:

• maternity or paternity leave
• sick pay
• Jobseeker's Allowance

In addition you could end up having to pay the tax and NICs yourself.


If you suspect your employer of not paying tax or NICs on your wages you can report them in confidence using the tax fraud hotline.


• Tax for the employed
• PAYE forms: P45, P46, P60, P11D
• Reporting tax fraud


If you work for more than one employer
If you work for more than one employer, you'll get a special tax code to take this into account.


Your tax allowances will normally be given against the pay from your main job. Your other job(s) will be taxed at the basic or higher rate, depending on your total income.

• Understanding your tax code

Employment rights

All employees have rights, whether they are full or part-time, casual or temporary, including:

• holiday pay
• National Minimum Wage
• protection from discrimination


If you're concerned about your rights, you can ask a union for help or get free advice from your local Citizens Advice Bureau.


• Check the facts about employment rights and find a union
• Find your nearest Citizens Advice Bureau

If you're a student

If you're a student, you still pay tax on your income unless all of the following apply:

• you're a full time student in the UK, only working in the holidays
• you're returning to full time education after the holiday
• your total income for the year is below the personal allowance


Ask your employer for form P38S and tax won't be deducted from your earnings.

National Insurance will still be deducted if you earn more than £100 a week.

• Find out more about tax for students

If you work for yourself

If you're self-employed on a temporary or part-time basis you must register with HMRC as self-employed within three months of when you first start work. You'll have to complete a Self Assessment tax return and are responsible for paying your own tax and NICs on the income you earn. (Even if you don't think you'll earn enough to need to pay tax, you still need to complete a tax return.)

Working for cash

You can accept cash payments for work you do, but it's illegal for you not to declare this on a Self Assessment tax return and pay Income Tax and NICs if these are due. This will depend on your overall taxable income in the tax year.

• Tax for the self-employed
• Information from Business Link on how to register as self-employed

Checking your employment status

It's important to understand the difference between being employed and self-employed, as this affects how you pay tax and NICs. Read more in our related article.

• Work out if you're employed or self-employed

Does how much you earn affect the tax you pay?

Everyone gets a personal tax-free allowance (£5,225 in 2007-2008). You don't pay tax on anything you earn below this amount.

The National Insurance you pay also depends on your earnings. You don't pay any National Insurance if you earn less than £100 a week.

• Personal and tax allowances
• National Insurance

More useful links:

• Employment rights, looking for work and more (employment section)
• More from HMRC on employment status
• Find out more about your rights at work
• Tax and NICs for the self-employed from Business Link
• Training and work-based learning (education and learning section)
• Work and work-related issues (over 50s section)

National Insurance

You pay National Insurance contributions (NICs) to build up your entitlement to certain social security benefits, including the State Pension. The type and level of NIC you pay depends on how much you earn and whether you're employed or self employed. You stop paying NICs when you reach State Pension age.

Who pays National Insurance?

You pay NICs if you are an employee or self-employed and you are aged 16 and over, providing your earnings are more than a certain level. You stop paying NICs at State Retirement age. This is currently 65 for men and 60 for women but will gradually increase to 65 for women over the period 2010 to 2020.

- Your National Insurance number
- Your National Insurance number (NI number) is your own personal account number. The number ensures that the National Insurance contributions and the tax you pay are properly recorded on your account. It also acts as a reference number for the whole social security system.

Who uses your NI number?

The only people you should ever give your NI number to are:

• HM Revenue & Customs (HMRC)
• your employer
• Jobcentre Plus, if you claim Jobseeker's Allowance
• your local council, if you claim Housing Benefit


Entitlement to many benefits depends on your National Insurance contribution record (see 'Benefits that depend on NICs' below) so it's very important not to give your number to anyone else.

You will also be required to provide your NI number if you open an Individual Savings Account (ISA).

• www.direct.gov.uk ISAs - learn more

How to get an NI number?

If you don't already have a NI number you must apply for one:

• as soon as you start work
• as soon as you or your partner claims benefit


To be able to apply you must be:

• over 16 years of age
• resident in Great Britain (England, Wales or Scotland)


If you are a parent or guardian and receiving Child Benefit, any children you care for will automatically get a card showing their NI number just before they reach the age of 16.


To apply for a NI number you will need to telephone the Jobcentre plus NI allocation service helpline on 0845 600 0643 . They will make sure you need a number and arrange for you to undertake an evidence of identity interview.

Evidence of identity interview

The interview will usually be one-to-one (unless, for example, you need an interpreter). The interviewer will ask you questions about your background and circumstances.


The interviewer may also ask you to fill in an application form.

- If you don’t have any official documents
- If you haven't got any official documents you still have to go to the interview. You might be able to prove your identity with the information you give at the interview.


• Find your local Jobcentre Plus office
• Download 'How to prove your identity for benefit purposes' (PDF file, 144K)
• Help with PDF files

National Insurance Rates

The following amounts apply for the 2007-2008 tax year:

If you're employed

• if you earn above £100 a week (the 'earnings threshold') and up to £670 per week you pay 11 per cent of this amount as 'Class 1' NICs
• you also pay one per cent of earnings above £670 a week as Class 1 NICs
• you will pay a lower amount as an employee if you are a member of your employer's contracted out pension scheme
• Check current NIC rates on HMRC website


If you're self-employed

• you pay 'Class 2' NICs at a flat rate weekly amount of £2.20
• you also pay 'Class 4' NICs as a percentage of your taxable profits - you pay eight per cent on annual taxable profits between £5,225 and £34,840 and one per cent on any taxable profit over that amount
• if your earnings in the 2007-2008 tax year are expected to be less than £4,635 then you may be entitled to the Small Earnings Exception (SEE), meaning you don't have to pay any Class 2 NICs - you can apply for SEE for the 2007-2008 tax year on form CF10
• Check current NIC rates on HMRC website
• Download Small Earnings Exception helpnotes and claim form CF10 (PDF document 925K)
• Help with PDF files

Benefits that depend on NIC contributions

Your entitlement to the following benefits and/or the amount you can get will depend on your (or in some cases your spouse or civil partner's) NIC contributions:

• Contribution based Jobseeker's Allowance (Class 1 NICs only)
• Incapacity Benefit (if you can't work for long periods due to illness or injury)
• State Pension
• additional State Pension (Class 1 NICs only)
• Widowed Parents' Allowance
• Bereavement Allowance
• Bereavement Payment
• http://www.womenandequalityunit.gov.uk/lgbt/partnership.htm More about civil partnerships

More useful links

• Your questions answered about National Insurance from HMRC
• How to claim back overpaid NICs
• More information about National Insurance contributions
• Working and paying tax
• National Insurance for Britons living abroad (Britons living abroad section)

In this section...

• Basics of the tax system
• Personal and tax allowances
• Understanding your tax code
• Income Tax
• VAT - Value Added Tax
• Stamp Duty
• Capital Gains Tax (CGT)
• Additional links Money, tax and benefits contacts

See also...

• Your money (parents section)
• Financial support (disabled people section)
• Money abroad (Britons living abroad section)
• Looking for work and employee rights (employment section)

Do it online

• File your tax online
• Find schools, childcare and nurseries
• Find a course (opens new window)
• List of services available online...

Useful contacts

www.direct.gov.uk

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