Rules concerning the taxation of employees can be complex. In addition to identifying what amounts need to be included in the monthly payroll, employers need to consider P11Ds for the reporting of certain benefits and expenses, as well as PAYE Settlements Agreements (PSAs) and share option reporting.
The introduction of the Off Payroll Working rules has also required the employer to consider ‘IR35’ and employment status – creating more burdensome reporting obligations than ever before. Given this, it is perhaps no surprise that we have seen a significant increase in the number of HMRC employer compliance checks.
The cost of dealing with an HMRC enquiry is not restricted to the time spent on protracted correspondence and sometimes site visits but, in the event that errors are discovered, there could be potential additional tax, interest and penalties to pay.
Failure to meet employer compliance obligations could also impact a future sale of the business. It is common practice for a buyer to undertake due diligence. If any irregularities are found, the purchaser will inevitably want to adjust the price to reflect this, or worse may lose confidence in the purchase.
Our solution is to ensure that the business has robust procedures in place that identify any tax risks and prevent exposure to the business, as well as identifying current issues and helping rectify these.
Given the recent announcement that employers will need to payroll taxable benefits from 6 April 2026 onwards, now is a great time for businesses to review their employer compliance polices to ensure they can identify tax issues in real time.
At HW Fisher, we are well versed in identifying the key employer compliance risks of each business and work with the relevant team members to establish or adapt the businesses policies to prevent issues arising.
Where appropriate we can review historic filings or advise on the tax and social security position of a proposed event.
The common procedures and policies that we advise an employer on are:
If you would like to discuss this further, please do not hesitate to contact Adam Bonell or Neil Maslen of our office.
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