PAYE Investigation, also known as an Employer Compliance Review
A PAYE investigation is conducted by HMRC to ensure an employer or contractor is meeting their tax, National Insurance (NIC) and Construction Industry Scheme (CIS) obligations. An investigation often begins at the employer’s premises, which enables HMRC to hold conversations without notice with diverse personnel and review prime records. HMRC’s focus often includes:
operation of PAYE and NIC
the reporting of Benefits in Kind on forms P11D (especially car and fuel)
the employment status of workers
the correct treatment of entertainment expenses
the operation of IR35
termination payments
travel expenses
vans
salary sacrifice
operation of payments to subcontractors under CIS
- the treatment of ex-pats and in-pats
To the extent that HMRC establish an additional liability to tax or NIC, interest on any late duties will be charged and potentially a monetary penalty, based on a percentage of the tax and/or NIC due.
