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Haines Watts Godalming Phone icon 01483 425 724

Payroll – legislation, compliance and penalties

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The complexities of payroll have increased and these days take in areas of compliance such as Real Time Information (RTI) and Auto Enrolment.

HM Revenue and Customs are now using RTI as they receive it to make automatic adjustments to Pay As You Earn (PAYE) tax codes, instead of waiting until the end of the tax year.

Their idea is to offer tax payers more certainty that they are paying the right amount of tax throughout the year, which should, in theory, result in fewer unexpected bills in the case of underpayments.

This could be good news, especially for people who have fallen foul of HMRC due to no fault of their own, other than failing to notice that their tax code is incorrect. For example, this might occur if HMRC has misunderstood that they have more than one job, or that, despite earning over £100,000, they’ve been given a personal allowance. These relatively simple errors can be stressful when HMRC expects the underpayment to be settled immediately.

As employees start to receive an increase in notifications about changes to their tax codes, there may be a greater number of questions to answer. Employers with payroll systems that don’t have an “automatic flow” will have more data updates to make.

Our advice is to remain vigilant and, should you receive a new coding notice, don’t assume that nothing further will change during the year.

Regarding auto-enrolment, since April staging dates have been issued which businesses who haven’t already fulfilled their duties cannot ignore. Employers who are late meeting their staging date must tell The Pensions Regulator (TPR) immediately. They may need to pay a fine but above all they’ll need to backdate enrolment of their employees in a pension scheme and make any contributions that they should have already made.

If you’re in doubt about your responsibilities don’t bury your head in the sand, take professional advice.

Want to know more? Call us on 01483 425 724 or email

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