Posted on 30 May 2014
We have recently seen a significant increase in HMRC Employer Compliance enquiries, and HMRC are being more aggressive in their approach towards seeking settlement of additional PAYE tax/NIC.
HMRC should carry out a Risk Based Assessment before the enquiry starts and, if a potential risk is identified it is this issue that should form the basis of the initial enquiry. However, HMRC seem to be starting enquiries without having a specific identified risk, and are trying to look at everything they can when they are at the business premises. This is proving lucrative for HMRC, expensive for businesses, and does not follow HMRC published guidance. The introduction of Real Time Information (RTI) has continued to put the spot light on PAYE tax/NIC for HMRC. RTI returns give HMRC much more valuable information about employees and employers than they have ever had before and they are using this to their advantage.
Employment taxes is complicated and covers a wide spectrum of areas including payroll, expenses, benefits, entertaining costs, potential employment status, termination payments, operation of CIS etc. The issues surrounding all these areas are constantly changing and it is difficult for employers to be fully compliant, which is why HMRC are investing in this area.
In response to this, we have recently welcomed Laura Parr as Assistant Director of Employment Taxes to the Smith Cooper Team. Laura has over 20 years of employment tax experience, having previously worked as an Employer Compliance Inspector at HMRC and latterly leading employment tax teams at KPMG.
If HMRC contact you regarding any employer compliance issue, or if they notify you that they are intending to start an enquiry, please contact Laura immediately. She will be able to advise you on your best approach, ensure that the enquiry is limited to potential areas of risk identified, minimise the potential settlement of additional PAYE tax/NIC penalties and interest being sought, and make sure that HMRC have as little impact on your business daily operations as possible. Without specialist Employment Tax advice at the earliest stage of the enquiry, you are likely to have to spend more time with HMRC answering their queries, and have a much higher settlement to pay at the end of the enquiry.
Laura can be contacted by e-mailing firstname.lastname@example.org or calling 01332 332 021.