Managing Your Employment Tax Risk
The Exchequer’s yield in respect of Income tax and National Insurance totalled in excess of £250bn (based on HM Revenue & Customs published accounts 2007/8).
This figure is significantly more than the combined yields of VAT and Corporation Tax.
In recognising this fact, HM Revenue & Customs has focused on Employment Tax issues, and has significantly increased the resources which are specifically dedicated to policing the employer compliance issues of employers.
HM Revenue & Customs is looking to employers to regulate their own compliance, to enable them to concentrate their focus on employers who are “non-compliant”.
They have therefore reorganised resources to concentrate on those employers which they consider “High Risk”, and believe to be non compliant.
They have rolled out a new penalty regime, which has been designed to encourage employers to make voluntary disclosures of compliance errors and mistakes. They have introduced grading to reflect lower penalties for employers who make voluntary disclosures, as opposed to errors or mistakes which HM Revenue & Customs may find as part of their review process.
To enable you to identify the factors which HM Revenue & Customs consider “High Risk”, we at Armstrong Watson have developed a questionnaire which, when completed, will enable us to assist you in understanding your potential risk areas. By understanding your potential risk areas you will be in a position to manage them and ultimately consider ways in which you can reduce your company’s risk profile.
Armstrong Watson has a dedicated team with the experience and expertise to help you reduce your employer risk profile, offering bespoke strategies which can help you achieve your business objectives.
Our recent experiences with HM Revenue & Customs compliance reviews have identified the key elements of improvements within your business procedures which will assist you in all compliance issues:
- Taking advantage of HM Revenue & Customs concessions which are available to all employers.
- Improving your knowledge of the Employment tax regime.
- Education of your key personnel
In the first instance we would request that you complete the following questionnaire. This is the first step towards assessing and managing your Employment Tax Risk.
We will then forward your FREE Tax Risk Profile Report, and contact you to discuss the potential risk areas identified from the answers provided.
The information which you provide in the questionnaire is for the sole purpose stated above.
- Employers with 'high risk' profile are more likely to have regular PAYE inspections.
- Late payments or returns can increase the employers risk profile.
- Employers without an up to date P11D dispensation or do not enter into a PSA may be considered non-compliant.
- Large volumes of entertaining will raise your risk profile in relation to employment tax, corporation tax and VAT.
- Overseas employees issues are very complex areas and seen by HMRC as “high risk”.
High Risk Indicators
- Employers with 'low risk' profile are less likely to have PAYE inspections.
- Employers making payments and returns on time can help reduce their risk profile.
- Taking advantage of dispensations and PSAs can help reduce risk.
- Having robust systems in place can help reduce risk profiles.
- Good policies and practices, together with appropriate tax and NIC advice can help reduce the risk of incorrect compliance.
Low Risk Indicators
To contact one of our Employment Tax Specialists call freephone 0800 983 1600 Or email us at: employersolutions@armstrongwatson.co.uk