All businesses, large and small, seek to reward their employees through pay and benefits which inevitably means dealing with the ever-increasing range and complexity of employment taxation, coupled with constant changes to legislation and guidance. Responsibility for correctly operating the PAYE system and reporting benefits in kind rests with employers and the costs of getting things wrong, even inadvertently, is high.

In addition to day-to-day payroll and the operation of PAYE and National Insurance, businesses will also, from time to time, have to deal with less familiar and more complex issues such as termination payments and what to do about employees coming from, or going to work, abroad. Businesses in sectors such as construction and hospitality and leisure have special tax rules and systems that need to be understood and complied with.

Pensions provisions are also an increasingly complex area, with the advance of auto-enrolment resulting in a complulsory pension provision in the workplace.

Many businesses use consultants or other similar personnel as a vital part of their business. Deciding on the correct employment status of a worker has important tax and employment law consequences and getting it wrong can lead to significant tax demands, an Employment Tribunal claim, or both. Consultants themselves will need to be aware of special rules that may apply to them. Commonly known as IR35, these rules are complex and subject to constant changes by the Courts and Tax Tribunals. Keeping up to date with these, and making sure you stay on the right side of the rules, is a major problem for one-man and other small service companies.

Almost all employees are entitled to be paid at least the National Minimum Wage. Whilst this in itself sounds straightforward, many businesses are unaware of the very detailed records which are often required to be maintained to demonstrate that this has been done.

Given the range of legislation that employers are faced with its perhaps no surprise that HM Revenue & Customs carry out more Employer Compliance Reviews than any other type of business tax enquiry. These are wide-ranging investigations covering many different aspects of employee taxation. HMRC usually carry out approximately 30,000 such reviews every year with an average bill for employers of £10,000.

How can WMT Chartered Accountants help?

We advise and assist employers on the tax implications of both cash salaries and non-cash benefits in kind, such as company cars and medical cover and help with the planning and preparation of annual P11D submissions. We also provide advice in structuring tax-efficient remuneration packages through the use of salary sacrifice and long term incentives for key personnel through share-based rewards.

The annual submission of forms P11D for business expenses incurred by employees can be onerous and time consuming. We can help by putting in place systems agreed with HMRC to reduce paperwork and save time and administration.

As well as assisting those businesses unfortunate enough to have been subject to an enquiry, we can offer peace of mind by carrying out Healthchecks into either a particular aspect or all of your employment tax affairs. In addition to identifying and rectifying any problems, we also look for opportunities to take advantage of all relevant exemptions and reliefs to minimise both your own, and your employees, liabilities.

Finally, we understand that sometimes businesses face cashflow difficulties which mean that there are problems in making payment to HMRC of PAYE and NICs due. If an agreement has not been reached with HMRC this can result in the imposition of extra charges on a business and the possibility of legal action including distraint (the removal and sale of business assets), County Court proceedings which can damage a business’s credit rating, and even Winding Up proceedings. WMT has a track record of successfully negotiating Time to Pay Agreements with HMRC to allow solvent businesses to continue to trade whilst paying off their debts.

If you would like to discuss any of the information above in further details, please contact Peter Davies on 01727 838 255.