Payroll Compliance
H.M. Revenue and Customs are increasing the number of payroll-compliance
visits they are making to check that tax and national insurance
deductions are being correctly calculated and all businesses
are at risk.
Employer PAYE compliance visits
H.M. Revenue and Customs are increasing the number of payroll-compliance
visits they are making to employers, with the aim being to ensure
that payroll and related matters are being correctly taxed.
Notification
You would usually be notified by post that a visit is going
to be made, though the initial contact can be by phone. The notification
will set out the documents that you need to have available at
the meeting.
Style of the meeting
The meeting is usually conducted at your premises and normally
two inspectors will attend. The exact format of the meeting will
vary from case to
case but there is usually an opening meeting, a review of the
documents and then a closing meeting to discuss the findings.
When the visit is booked, you will usually be given an indication
of how long it will last.
What are the inspectors looking for?
Again, this will vary, but the visit will typically include
a review of:
- all payroll records
- all benefits paid to employees, e.g. cars, health care
- expenses paid to employees
- the status of contractors - for instance, checking whether
subcontractors in the building industry are genuinely self-employed
or whether they should really be treated as employees (see
the back page section titled 'New legislation for subcontractors').
Conclusions
At the end of the meeting, the inspectors will report their
findings. There might be 'matters of fact' that you and they
can agree at the time, such as the failure to use the correct
tax rate. Matters of opinion or disputed areas might need further
correspondence or meetings to resolve.
Where errors are found, the inspectors will seek to recover
the unpaid tax and national insurance. You might be charged penalties
depending on the magnitude and seriousness of the errors.
We would recommend that you seek the advice of an accountant
to help you through the process so if you are notified of a visit,
you should contact us immediately.
