Employer Compliance checks have proven to be a very lucrative Revenue raiser. What normally starts off as a payroll check can extend into a full enquiry encapsulating:

  • How benefits and expenses have been reported
  • Status checks of subcontractors
  • If PAYE has been operated correctly on remuneration tax strategies
  • An in-depth review of the director’s loan account

These type of checks need to be handled with great care as the same mistake can give rise to a large expense for a business.

We can help to manage the risk. 

HMRC payroll requirements

Most employers need to operate PAYE as part of their payroll, which allows HMRC to collect Income Tax and National Insurance from employment.

Ordinarily, you must collect and keep records of:

  • What you pay your employees and the deductions you make
  • Reports and payments you make to HM Revenue and Customs (HMRC)
  • Employee leave and sickness absences
  • Tax code notices
  • Taxable expenses or benefits
  • Payroll Giving Scheme documents, including agency contract and employee authorisation forms

Your records must show you have reported accurately and you need to keep these details for three years, from the end of the tax year they relate to. 

HMRC may check these records to ensure you are paying the correct amount of tax. If HMRC discovers that your records are not complete and up to date you could be liable for a penalty of up to £3,000.

If your records are lost, stolen or destroyed, contact us as a matter of urgency. Do not wait for HMRC to make a discovery.

You are obliged to inform HMRC if your final payroll report of the tax year includes figures that are:

  • Estimated – that you want HMRC to accept as final
  • Provisional – that you’ll update later with actual figures

If you are concerned about anomalies in your payroll records or you are facing a penalty as a result of a failure to keep records, help is available. We can assist you in presenting your case favourably to HMRC. Please contact us.