PAYE Investigations/Employer Compliance Reviews
These are instigated by one of the Employer Compliance teams attached to your PAYE office.
Why are you selected?
You may have been selected at random, on a cycle, or specifically selected for review based on a risk assessment. Factors that will be considered when selecting employers for review include:
-
Poor past compliance history, for example end of year returns filed late.
-
Length of time since last review and outcome of that review.
-
Size of business.
-
Business sector: some sectors tend to provide more staff benefits or be less rigorous in capturing and reporting benefits provided.
-
Matters picked up by the corporation tax Inspector during a review of the company accounts, such as high levels of staff welfare, team building exercises or large numbers of freelancers.
-
Matters picked up from an enquiry into the tax return of an employee or a director which indicates benefits in kind were received that were not reported on the form P11D.
-
Information from other sources, such as articles in the press covering prizes being given to sales staff.
What happens during a Review?
The Employer Compliance Review tends to follow a fairly standard pattern:
-
You will receive a letter advising you that the Inland Revenue would like to carry out the review and arrange a time to visit your premises. The opening letter may set out a list of the main records that they will want to review.
-
Depending on the size of your business, one or more reviewers will visit your premises and want to meet the person responsible for the payroll/benefits reporting and normally also one or more of the directors.
-
They will start by going through a fairly detailed checklist of questions with you which will help them to understand your business and which may indicate errors in your process or areas where there is a risk which they need to investigate.
-
They will then carry out a detailed examination of the records. Before leaving they will want a second meeting to summarise their findings and set out areas where they would like further information.
-
Shortly after the visit you will receive a letter setting out their findings together with a note of further information that they require and probably an initial calculation of additional liabilities that they believe are due.
-
Where calculations are provided, you will be invited to accept them and make a payment.
-
Interest and penalties may be added to any underpaid tax.
-
Where the status of freelancers is in doubt, specialist help from a Status Inspector will be obtained by the Inland Revenue.
How can we Help?
Our director, Nick Lloyd, has resolved numerous Employer Compliance Reviews on behalf of his clients over the last 14 years. We therefore have a great deal of experience which can be used to help you throughout the process:
-
Briefing you on the questions that the Inland Revenue are likely to ask.
-
Advising you on the validity or otherwise of the Inland Revenue's conclusions.
-
Dealing with the correspondence with the Inland Revenue on your behalf.
-
Advising you on negotiating tactics in concluding the review and agreeing a settlement
To discuss how we may help, please call Nick Lloyd on 01344 843495, or email us at info@wentworthaccountancy.co.uk