Click Fraud Protection

Connecting...

Payroll mistakes ‘cost businesses over £700m’

News | Payroll errors | Businesses | accountancy

W1siziisijiwmtcvmdqvmjyvmtmvmdmvndivnze2l2fjy291bnrpbmcty2fsy3vsyxrvci1hbmqtzmlszxmuanbnil0swyjwiiwidgh1bwiilcixmdawedqwmcmixv0

In the last financial year, payroll errors have cost businesses over £700 million, with underpaid tax relating to individuals who were wrongly declared as self-employed at the root of many of the issues, claims accountancy firm UHY Hacker Young. 

Research revealed that HMRC collected £737.3 million from investigations into employer compliance, with the majority of it relating to self-employment. 

In cases where businesses had declared individuals to be self-employed, when HMRC has decided they should count as employees, the organisations became liable for national insurance payments.

Additionally, in some cases, businesses were also liable to higher tax charges than they would have paid if they had initially declared them as employed.

SME’s in particular were hit hard by a crackdown on payroll tax deductions, which accounted for almost half of the cash collected, despite being responsible for only a tenth of UK payroll.

According to UHY Hacker Young’s head of tax, Roy Maugham, the onus was on the HR team to apply tests to determine who was truly self-employed.

“A lot of cases are grey rather than black or white and tests include whether someone is capable of substituting themselves,” said Mr Maugham.

“Companies used to ask individuals to invoice them through a company name but HMRC is looking at things like: does that person have a pass to the canteen? Are they on the employer’s telephone list?”

UHY Hacker Young believes that much of the underpaid tax is down to genuine errors which suggests that the government needs to simplify its system to help SMEs avoid mistakes.

Umbrella companies, which offer a cheaper alternative to employing full-time staff, have also been a particular problem for SMEs when it comes to payroll tax.

“Those employing flexible workforces or operating as umbrella companies, for example, might find it difficult to determine which box their labour force falls into when it comes to paying tax,” concluded Mr Maugham.


Posted by Jon Aspinell on 20th May 2016

SHARE

LATEST JOBS
W1siziisijiwmtcvmdqvmjqvmtevmzmvndavnty5l21hcmsxlmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Marketing Executive

Milton Keynes

£28,000

Join a hugely successful business services group as a commercially aware, analytical, but creative marketing executiv...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndcvntgvmjy1l1cxc2laaulzswpjd01uy3znrff2twprdk1urxznelv2turrdk5etxhmm2rwy21vdwfulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Junior PHP / Web Developer

London, England

£25000 - £35000 per annum

Junior PHP Web Developer - Highly Technical Application - Friendly, Professional Business This company is an exciting...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndcvntgvmjy1l1cxc2laaulzswpjd01uy3znrff2twprdk1urxznelv2turrdk5etxhmm2rwy21vdwfulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

IT Support Manager

Sutton, Surrey

£35000 - £45000 per annum

IT Support Manager - Sutton, Surrey - £35,000 - £45,000 depending on experience A split role between hands-on technic...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndcvntgvmjy1l1cxc2laaulzswpjd01uy3znrff2twprdk1urxznelv2turrdk5etxhmm2rwy21vdwfulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

IT Support Engineer

City of London, London

£30000 - £35000 per annum + good benefits

A fantastic opportunity has arisen within a successful media organisation. They are looking for a 2nd Line Support En...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndcvntgvmjy1l1cxc2laaulzswpjd01uy3znrff2twprdk1urxznelv2turrdk5etxhmm2rwy21vdwfulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Software Architect (C++)

West Sussex

£85,000

A well-established businesses are seeking a C++ Developer to design and develop market leading software for a range o...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndcvntgvmjy1l1cxc2laaulzswpjd01uy3znrff2twprdk1urxznelv2turrdk5etxhmm2rwy21vdwfulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Java Developer - North London - £35,000

North London, London

Up to £35000 per annum + 25 days holiday and benefits

Java Developer (Extensive training and development offered) - North London - £35,000 plus 25 days holiday and benefit...

READ MORE
W1siziisijiwmtgvmdqvmtgvmtmvmjmvnduvnza0l1jlbw90zs1taw4ucg5nil0swyjwiiwidgh1bwiilcizmzv4mtcwi25lil1d
Insight

How can you ensure cohesive communication with a team of remote workers?

Remote working is becoming increasingly adopted by organisations across the globe - whether that takes the form of an...

READ STORY

W1siziisijiwmtgvmdevmjqvmdgvntkvmtavndyyl2ltywdlmtqtbwlulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mcnuzsjdxq
Insight

Can HR tech ease workplace conflict?

Workplace conflict is mostly unavoidable - particularly when businesses hire strong-minded talent with big ideas. Ego...

READ STORY

W1siziisijiwmtgvmdevmtyvmdgvntcvmzcvmtk5l1dlbgwxyi1taw4uanbnil0swyjwiiwidgh1bwiilcizmzv4mtcwi25lil1d
Insight

What to prioritise in your employee experience

The candidate experience has long been valued by employers looking to attract fresh talent. Now, however, companies a...

READ STORY

W1siziisijiwmtgvmdevmtavmtyvmdavntmvmtyzl0ltywdlntatbwluicgxks5wbmcixsxbinailcj0ahvtyiisijmznxgxnzajbmuixv0
Insight

What can HR expect in 2018?

HR departments are set to face many new challenges in 2018, from the technological to the traditional. Among the most...

READ STORY

W1siziisijiwmtcvmtevmjgvmtcvmdevndqvnzivaw1hz2uyni1taw4ucg5nil0swyjwiiwidgh1bwiilcizmzv4mtcwi25lil1d
Advice

From communication to drive: The importance of soft skills

Soft skills are often difficult to quantify, yet they can become an absolute necessity for your business to reach its...

READ STORY

W1siziisijiwmtcvmtevmdgvmtavntqvmzivotuvaw1hz2uxns1taw4uanbnil0swyjwiiwidgh1bwiilcizmzv4mtcwi25lil1d
News

Only one in three workers say their employers offer training

Just one-third of workers report that their employer offers regular training opportunities, a new poll by the Trades ...

READ STORY