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HMRC collects £737m in payroll errors

Small firms have a target on their back amidst HM Revenue and Custom’s war on payroll errors.

Payroll mistakes made by small and medium enterprises make up more

than 50 per cent of HMRC’s £737m collection that was a result of looking into employer compliance and tax avoidance errors.

Larger firms paid a smaller figure (£363.9 million) compared to smaller businesses, in spite of the former comprising 89 per cent of total payroll in the UK (£726 billion).

Accounting group Hacker Young made the point that SMEs don’t have the necessary resources and finances available to be advised of tax issues, which means that they have a greater risk of errors in filing complex compliance tax returns.

UHY Hacker Young tax partner Roy Maugham said:

“SMEs are being chased for a totally disproportionate amount of underpaid payroll tax, compared to their larger counterparts. But much of the underpaid tax is due to genuine errors. This strongly suggests the government needs to simplify its systems to help SMEs avoid mistakes.”

He went on to say that investigations are sometimes a disruption, and expensive, to SMEs. He said that although there will be some engaged in tax avoidance, most will be falling foul of a complicated tax system.

The tax system can certainly be complex and HMRC seems quick to pounce on any mistake to add to its coffers. That is why it is so important not to risk making errors by having untrained eyes take charge of your accounting books. It is always advisable to employ the services of an accountant in the Wirral to stay in HMRC’s ‘good books’.

Posted by Mark
May 26, 2016

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