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HMRC’s latest employer compliance drive to target Mid-sized Businesses
20 November 18 | By: Jas Jhooty
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In recent years HMRC have been focussing primarily on Large Businesses by conducting “Know your Customer” meetings with them to identify any lax employment tax procedures. As HMRC have nearly exhausted the employer compliance yields from Large Businesses they are now turning their attentions towards Mid-sized Businesses (i.e. those with a turnover of between £10 million and £200 million) and Public Sector bodies. These employers are shortly going to receive HMRC notification of a request for a “Check of Employer Records”.
Check of Employer Records
This is a new initiative by HMRC targeted at Mid-sized Businesses to enable HMRC to quickly assess whether or not they should conduct a full-blown Employer Compliance Review on the employer.The check firstly consists of a Compliance Check Questionnaire requiring to be completed by a senior financial figure in the business. This is then followed up by a detailed telephone call from a HMRC compliance officer for them to assess if the business has or has not been adhering to their employment tax obligations. Common danger areas include:
- Accurate Business mileage capture
- Correct identification of Permanent Workplaces and Temporary Workplaces
- Entertainment costs being correctly identified
- Employment status of off-payroll workers
- Correct taxation of termination payments
If the business cannot answer HMRC’s questions fully; or do not appreciate the significance of some their questions, they will be asked to submit further records for review. If these records are deemed to be inadequate by HMRC, they will have no qualms about commencing an Employer Compliance Review.
Mid-sized businesses have been left alone by HMRC compliance officers for a good number of years while HMRC concentrated their resource on Large Businesses. Therefore, there is a very high chance that unintentional errors may have arisen over time that HMRC will now seek to exploit.
How emTax can help
A number of our clients have already received their “Check of Employer Records” notification. We have assisted these clients by informing them of the significance of the questions contained in HMRC’s Compliance Check Questionnaire and have further advised them on how to answer HMRC’s questions to minimise the likelihood of any further enquiries.
emTax has developed a free webinar on How to keep safe from HMRC that you can register for here that details what the danger areas to your business will be so that you can prepare now to keep your business safe.
If you are interested in this or any other employment tax service that we offer, please do not hesitate to contact us.