PAYE Health Check
PAYE legislation has become increasingly complex, leading to a significant rise in employer compliance visits by HM Revenue and Customs (HMRC). As a result, many companies that fail to keep up with these legislative changes are facing steep financial penalties. Modern payroll now involves much more than the simple deduction of tax and national insurance; it requires constant vigilance regarding evolving employment laws.
Our PAYE Health Check service is designed to identify and resolve potential payroll issues before HMRC initiates a formal investigation. We provide the expert oversight necessary to ensure your records are accurate and fully compliant with current UK law.
There is a corresponding rise in penalties charged for non-compliance as companies fail to keep up with the changes; payroll now includes much more than the deduction and paying of tax and national insurance.
Recent changes to legislation affecting employers have included, but are not limited to, the deduction of student loans, the EC Working Time Directive and consideration of National Minimum Wage (NMW) and National Living Wage (NLW).
In recent months, it has become evident that HMRC is targeting employers who are using off-payroll workers, including the issue of letters that question the status of workers.
HMRC doesn’t discriminate. Any of your clients, no matter what the size of the business, could find themselves subject to scrutiny and face the stress and anxiety of dealing with a visit from HMRC. The first notification your client will have of this will be a letter headed ‘Check of Employer Records’.
What is Included in Our PAYE Health Check?
Our comprehensive audit is designed to find the errors that PAYE inspectors typically look for. We conduct a thorough review of your systems, providing you with a detailed report on your compliance status. Our service includes:
- Payroll Record Auditing: Reviewing and sample checking your payroll records to identify manual or system-generated errors.
- Return Analysis: Statistically analysing your completed PAYE returns and checking for accuracy in their completion.
- Financial Reconciliation: Comparing your PAYE returns against your annual accounts to ensure consistency and identify discrepancies.
- Leaver and Starter Protocols: Checking that all new employees and those leaving the business are processed correctly according to HMRC guidelines.
- Statutory Payment Review: Auditing your records for Statutory Maternity Pay (SMP), Statutory Sick Pay (SSP), and student loan deductions.
- Worker Status Assessments: Identifying any workers where employment status may be a concern, helping you navigate IR35 and off-payroll working rules.
- End of Year Compliance: Checking the accurate completion of all year-end returns.
- Benefits and Expenses: Reviewing Benefit in Kind (BIK) and expenses disclosures to ensure correct calculations and P11D reporting.
- Planning Opportunities: Identifying legitimate PAYE planning opportunities to improve your company tax position.
The Risks of Payroll Non-Compliance
Recent changes affecting employers have included the introduction of more complex student loan deductions, the EC Working Time Directive, and the ongoing adjustments to the National Minimum Wage (NMW) and National Living Wage (NLW). Furthermore, HMRC is currently targeting employers who utilise off-payroll workers, often issuing letters that question the employment status of contractors and freelancers.
HMRC does not discriminate based on the size of a business. Any organisation, from a small startup to a large enterprise, can find itself subject to scrutiny. The first notification of such an event is typically a letter headed “Check of Employer Records,” which can trigger a period of intense stress and anxiety for any business owner.
Specialist Support for the Construction Industry
In addition to our general payroll services, we provide a specialist CIS health check for businesses operating within the construction industry. The Construction Industry Scheme (CIS) has its own unique set of rigorous compliance requirements, and our team is adept at ensuring your subcontractor records and monthly returns are in perfect order.
Why get a PAYE Health Check?
Our PAYE Health Check service is designed to find any payroll issues before HMRC comes knocking.
The health check can:
- Review and sample check your payroll records for errors
- Sample test the most common errors that the PAYE inspectors look for
- Statistically analyse your completed PAYE returns
- Sample check the completion of PAYE returns
- Compare your PAYE returns against your annual accounts
- Sample check leavers and starters to make sure they are correctly dealt with
- Review statutory maternity pay, statutory sick pay, student loan deductions and working tax credits
- Identify any workers where status issues may be a concern
- Check completion of the end of year returns
- Review benefit in kind and expenses disclosures and calculations
- Check expenses dispensations
- Identify any PAYE planning opportunities.
We can also provide a similar service in respect of a CIS health check for the construction industry.
Why Partner with Keirstone?
By utilising our PAYE Health Check, you are taking a proactive step toward protecting your business. We believe in finding solutions today to prevent the problems of tomorrow. Our dedicated managers act as a trusted extension of your team, providing professional advice and support whenever you need it.
Are you confident that your payroll records could withstand an HMRC inspection?
Contact Keirstone today to find out more about our PAYE Health Check and ensure your business remains compliant and secure.
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