The absolute worst thing that can happen to an employer in the context of PAYE tax compliance, is for HMRC to come along and do a PAYE audit or review and find lots of errors. This could not only mean a significant settlement of additional tax and National Insurance liabilities (much of which could possibly have been avoided) but also hefty penalty charges which would be much higher than normal given that HMRC uncovered the errors instead of the employer flagging these up.

The only way an employer can avoid this scenario happening is by being totally "on the ball" in terms of current legislation and HMRC practice, whether their current processes and procedures for staff payments are fit for purpose, whether tax liabilities are being incurred inadvertently or unnecessarily and also whether there may be opportunities to do things more tax efficiently or less open to challenge by HMRC.

A PAYE Risk Review (or Healthcheck as some prefer to still call it) is an absolute must for any employer who is not "on the ball" with their current PAYE compliance situation or who hasn't had an HMRC visit for many years. Have a read of our blog posting "PAYE Review/ Healthcheck - Why Do It?" if you still need convincing.


What support can Optimum PAYE provide ?

There are various ways in which we can undertake a PAYE Risk Review for an employer, which all depends on the employer's specific situation and requirements, but the following should give an idea of the type of input we can provide to assist the employer in being more compliant for when HMRC do eventually undertake an audit:

  • Desktop review of processes, procedures and payments to identify high level areas of concern
  • Onsite review of processes, procedures and payments to identify key issues, concerns, opportunities. This may include discussions with key personnel, review of documentation, sample testing and a run-through of payment processes
  • Summary report including main risk areas, potential opportunities and recommendations going forward
  • Providing guidance and input to follow through on the recommendations made, e.g.
    • Updating or introducing a comprehensive P11D Dispensation and agreeing this with HMRC
    • Updating or introducing a PAYE Settlement Agreement and agreeing this with HMRC
    • Updating or introducing new internal policies, e..g. staff expenses, relocation, engagement of consultants, company cars, etc etc
    • Revising processes and procedures to reduce or remove tax risk
    • Training staff around key risk areas
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