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.

Please contact our accountancy recruiter team for more insights and information.


Posted by Jon Aspinell on 20th May 2016

SHARE

LATEST JOBS
W1siziisijiwmtcvmdqvmjqvmtevmzmvndavnty5l21hcmsxlmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Digital Marketing Manager (Events) -...

London, England

£42000 - £45000 per annum + bonus

Digital Marketing Manager - London - up to £45,000 plus generous bonus and benefits. The Ashdown Group has been engag...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndcvntgvmjy1l1cxc2laaulzswpjd01uy3znrff2twprdk1urxznelv2turrdk5etxhmm2rwy21vdwfulmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Front End Developer - West London - £...

Kensington and Chelsea, London

£50000 - £60000 per annum

Front End Developer (JavaScript, Angular or Knockout) / Web App Developer / Mid-Level Front End Developer The Ashdown...

READ MORE
W1siziisijiwmtcvmdqvmjqvmtevmzmvndavnty5l21hcmsxlmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

B2B Marketing Executive - East Sussex...

East Sussex, England

£30000 - £40000 per annum

B2B Marketing Executive - Three Years+ Experience Needed Joining this successful, long established company - you will...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndkvmduvmta4l1cxc2laaulzswpjd01uy3znrfv2twpzdk1urxznakl2turndk9euxpmmezqwxkxdgfxlmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Bookkeeper - Covent Garden, London - ...

London, England

Up to £32000 per annum

Assistant Accountant - Covent Garden, London - £32,000 A highly successful Accountancy practice that specialise in th...

READ MORE
W1siziisijiwmtcvmdqvmjqvmtevmzmvndavnty5l21hcmsxlmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Senior Marketing Executive - (Digital...

London, England

£32000 - £35000 per annum + 20% bonus

An excellent opportunity has arisen for a Senior Marketing Executive to join an international and well-established di...

READ MORE
W1siziisijiwmtcvmdcvmtavmtavndkvmduvmta4l1cxc2laaulzswpjd01uy3znrfv2twpzdk1urxznakl2turndk9euxpmmezqwxkxdgfxlmpwzyjdlfsiccisinrodw1iiiwimzm1ede3mfx1mdazyyjdxq
VACANCY

Credit Controller - Kent - £18p/h - 3...

Queenborough, Kent

£15 - £18 per hour

Credit Controller Contract - Queenborough, Kent - £18 p/h - 3 months + An award winning, client in Queenborough, Isle...

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

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

W1siziisijiwmtcvmtevmdgvmtavmzivntuvndgzl0ryaw5rlw1pbi5qcgcixsxbinailcj0ahvtyiisijmznxgxnzajbmuixv0
Advice

How can you encourage an inclusive work environment?

Inclusivity in the workplace is an ideal most astute businesses strive for. Making employees feel comfortable and val...

READ STORY