The latest tax gap figures show a black hole of more than £3 billion for PAYE. This gap is being put down to employer errors.
The gap that HMRC is talking about is the difference between the amount that is actually paid, and what should, in theory, be collected through PAYE on earnings; other income from employment; and the tax due on occupational pensions taxed through PAYE.
So what do employers have to do to make sure they don’t accidentally end up on the wrong side
of HMRC’s statistics? Good record keeping is always key. So, too, is prompt payment of PAYE and National Insurance contributions, and timely filing of RTI returns and P11Ds. Making sure that employee information is accurate, and knowing what to do to correct an error as soon as it is discovered — these are also important. Mistakes can get in where a business miscalculates someone’s employment status. Where a payroll system hasn’t been updated. Where employee records didn’t note a change to salary, hours or personal details.
There’s more than enough to prove challenging, and with the risk of penalties, mistakes can soon become expensive. We can help you check that you are operating PAYE correctly.
* Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
