Enquiries by HMRC into PAYE, NIC, Benefits in Kind and Employment Status: Code of Practice 3

HMRC conduct enquiries into compliance by employers with the PAYE and benefit rules. The work is usually done by specially trained Employer Compliance Officers and is conducted under Code of Practice 3 (COP3). Such reviews may also arise from a full enquiry into an individual under COP 11 or Company under COP14. An employer compliance review may also lead to a Civil Investigation of Fraud enquiry or be a necessary component of a Disclosure Report. HMRC say that Employer Compliance Review work usually consists of a full review of an employer’s remuneration package. The review can include

the operation of PAYE and Class 1 National Insurance contributions (NICs) on employees’ and directors’ remuneration
expenses payments, benefits and other rewards provided to employees and directors
operation of the Construction Industry Scheme (CIS) for sub-contractors (SC)
operation of Statutory Maternity Pay (SMP), Statutory Sick Pay (SSP), Statutory Paternity Pay (SPP) and Statutory Adoption Pay (SAP)
Tax Credits
Collection of Student Loans
Class 1A NICs
Employment Status

The status of workers has been a major issue for HMRC. Are they employees or self employed? It can be very expensive if an employer decides to pay workers gross and it is later decided that in fact they were employees. Many cases have gone to Tribunals and the Courts in recent years but it is still a complex issue demanding careful and specialist review.

EDF Tax can conduct a review of your workers employment status and advise on any action required.

We have the experience, resources and skills to represent you in what can be a difficult and demanding time. Iain Macleod, head of Tax Investigations at one time managed a large HMRC Office engaged in Employer Compliance Reviews.

EDF Tax do not prepare employer or benefit returns so your existing staff or advisers retain these roles. We are flexible on how best to support you. We can engage directly with you and bring the review to a conclusion. Or we can work with your accountant to resolve matters or advise on issues such as meetings, information powers, inspections, penalties and negotiation of the final liability

Our approach is non judgmental and geared to achieving the best result for you as quickly as possible. While we aspire to a productive relationship with Employer Compliance Officers and Inspectors of Taxes we will present your case vigorously and robustly. At all times you will be kept informed of developments and options for settlement will always be clearly explained to you.

We will:

Advise on the technical issues arising including employment status
Advise on whether to attend meetings with HMRC
Quantify any disclosure
Compile any Disclosure Report
Advise on how many years HMRC can assess
Advise on whether it is worth having an appeal heard before a Tribunal
Negotiate the amount due
Negotiate the amount of any penalty
Conclude the enquiry

For further information please contact Iain Macleod on 0115 983 5580 or mobile 07920 146800 or email Iain at imacleod@edftax.co.uk