how to survive a paye audit
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Complimentary Webinar Slides:
How to Survive a PAYE Audit
7 January 2014
Nigel Gorski
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
About Your PresenterNigel is a fully qualified chartered accountant with considerable people management and training experience. He has not only worked in industry and for one of the ‘big 4’ accountancy firms but now runs his own accountancy practice. Nigel has considerable business mentoring experience and delivers the following modules for The Business Springboard:The 4D Manager – 2.5 DaysFinance for operational managers – 1 dayManaging Peformance – 1 dayDelivering exceptional customer service– 1 dayBusiness mentoring packages
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
Disclaimer & Copyright
These materials are designed solely for the use of participants on our courses. These materials shall not be copied or reproduced in any format whatsoever without the prior consent of The Business Springboard Limited.The content of these materials does not constitute advice tailored to any participant’s specific needs and to the maximum extent permitted by applicable law, The Business Springboard or any of its employees or associates shall not be held liable for any direct, indirect or consequential loss or damage arising as a result of use of these materials.
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
Welcome
Introduction to HMRC Enquiries How you could be selected for a PAYE audit Payroll checks ‘Employing’ freelancers Employee expense payments At the end of the Review Questions & Answers
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
Introduction to HMRC Employer Compliance Reviews
The UK tax system is based around self assessment
In practice this usually means a combination of professional advice and good software!
HMRC select businesses for inspection in a number of ways
You will generally get notice of the meeting The letter will explain what the inspector wants
to see HMRC will also let you know how long the visit
will take You can ask for a change of date if someone is
on holiday You will meet HMRC at your business premises
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
How HMRC Select EnquiriesThere are a number of ways in which an ‘Employer Compliance Review could happen: Purely random – believe it or not! A risk trigger from previous year information or
industry type Lots of RTI errors and rejections Erroneous P11Ds Late returns It could be a general compliance review or an
‘aspect enquiry’
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
The Visit: Payroll Checks
The inspector will want to see: See payroll, bank and cash records Check some calculations including statutory
payments Make sure tax codes are being applied Industry specifics like tips or loans might be
covered Make sure the new RTI ‘on or before rule’ is
being applied (small business exemption applies)
Potentially look at minimum wage Financial information supporting P11Ds, for
example a common area for errors is car values not being correct
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
‘Employing’ Freelancers
Care needs to be taken in this area It’s a big earner for HMRC Employing people who ‘pay their own tax’
instead of employees is generally not a good idea although it might in the short term save a bit of employers NI
You can verify their status using the employment status indicator
If they should be employed then you must take action
This does not apply to consultants working through their own service companies
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
Expenses
The inspector may want to see a sample of expense forms
Mileage is always a good earner for HMRC as there are frequent challenges on whether a journey is a business journey
Similarly mobile phones and home working Make sure you have properly documented
mileage logs Ensure that expense payments are in line with
your dispensation or settlement agreement Watch our for entertaining and the annual limit Similarly gifts need to be ‘trivial’
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
At The End of the Review
The inspector will provide a summary of findings and any information they require
A full written report will be issued afterwards The report can be disagreed with and can
sometimes ask for further clarification There may be additional tax with a penalty
and interest Any payments to employees are generally
treated as net payments and the assessment is grossed up
Penalties vary depending on whether they are accidental (upto 30% of the tax) or deliberate (upto 100% of the tax) and whether you’ve been ‘helpful’
There is always a right of appeal Don’t forget reasonable care!
w: www.thebusinessspringboard.co.ukt: 0113 2089922
Business Savvy, Training Know How
HR Law & Practice Leeds & Newcastle 2014
Need to keep up to date with employment law? Want expert advice on how to put the latest
employment law into practice? HR law & practice is a year round resource for
HR professionals. Our programme of regular employment seminars and interim updates bring you an essential combination of legal expertise and practical advice.
Join our breakfast seminars in Leeds or Newcastle – ask for details!
w: www.thebusinessspringboard.co.ukt: 0113 2089922
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Inspiring training & development for real business
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•The 4D Manager •marketing & PR• finance• people• customer service• leadership & management
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