HMRC were in for a lucrative time last year off the back of a number of Payroll Investigations. The total additional tax collected was £819 million, an increase of 16% on the previous year.
A large proportion of the tax generated was where the “Employment Status and Intermediaries” team identified workers who were classed as self-employed but really should have been classified as employed.
Treating a worker as self-employed reduces the tax and National Insurance which HMRC receives so they are very keen to prove that such workers should be employed. If they can do this, the employer ends up with a substantial backdated bill – in addition to the cost of dealing with the enquiry.
We understand that the number of such enquiries is increasing, possibly because HMRC see it as a “quick and easy” way to produce revenue.
Be ready for payroll investigations
We can help and support you in two ways:
- We will help you ensure that all of the people who work for you are correctly categorised – leaving no room for error or misunderstandings
- By ensuring all of our clients are automatically covered by our Fee Protection insurance which handily covers the cost of our dealing with an enquiry for you*
Not only are HMRC increasing the number of Payroll Enquiries but The Pensions Regulator has team’s calling on businesses to ensure they are complying with their legal responsibilities in respect of Workplace Pensions. Those teams are currently working in the East Midlands – Leicestershire, Nottinghamshire and Derbyshire.
The probability of being visited by either HMRC or The Pensions Regulator has increased considerably, so don’t be caught out.
*This is of course subject to the insurers terms and conditions.