Payroll

HMRC collected over 800m from payroll investigations last year

Fred Heritage | 12 February 2018 | 6 years ago

HMRC scrutinises businesses that hire large numbers of self-employed workers
The Treasury gathered 819m of additional tax revenue from business payroll investigations last year, as it attempted to clamp down on company bosses that wrongly defined workers as self-employed.

The additional tax was collected on the back of payroll investigations by HMRC’s employment status and intermediaries team and was 16 per cent more than that collected by the tax office in 2015/16.

According to data released by HMRC after a freedom of information request, investigations into the payroll processes of larger businesses generated the bulk of the additional tax.

In 2016/17, some 503m was collected from larger employers, up from 383m (a 31 per cent increase) from the previous year.

The employment status and intermediaries team was set up by HMRC to investigate UK businesses that claim to have a high number of self-employed workers on the payroll.

The team acts on intelligence and complaints made to HMRC about the purported misuse of self-employed staff. It investigates organisations which class workers as self-employed in an effort to avoid paying tax and looks at how the self-employed are used in the gig economy more generally.

According to Paul Noble, head of tax investigations at law firm Pinsent Masons, the rapid growth of the gig economy in recent years has encouraged HMRC to scrutinise businesses which hire large numbers of self-employed more heavily.

hMRC has made no secret of its suspicions of how companies classify their workers, Noble told Personnel Today. Considering the scale that the gig economy [has] grown to it is no surprise that it is now under intense scrutiny.

Noble added it was crucial that employers regularly reviewed their PAYE systems and remained up to date with the latest HMRC rules on self-employment and gig economy workers.

The statistics follow last week’s publication of the Good Work plan the government’s response to last year’s Taylor review into modern employment practices.

The plan was criticised by some employment groups for failing to properly address issues surrounding sham self-employment and exploitation of workers in the gig economy.

__________________________________________________________________________________
ALT TEXT

 

Statutory pay rates: Advice for employers ahead of April’s increases

Each year, the Department for Work and Pensions carries out a review of the current statutory pay rates and makes proposals for the following financial year

__________________________________________________________________________________

Topic

Payroll

Related Topics

What is Payroll Flow? How Companies Such as PayFit are Streamlining Payroll Processes for SMEs
21 July 2023

What is Payroll Flow? How Companies Such as PayFit are Streamlining Payroll Processes for SMEs

Read More →
A Guide For Employers & Employees When Working A Week In Hand
1 April 2022

A Guide For Employers & Employees When Working A Week In Hand

Read More →
How has COVID-19 affected payroll?
27 January 2022

How has COVID-19 affected payroll?

Read More →
How does payroll work? Here’s what you need to know
15 June 2021

How does payroll work? Here’s what you need to know

Read More →
Tesco underpaid workers by over 5m. What are the consequences?
20 January 2021

Tesco underpaid workers by over 5m. What are the consequences?

Read More →
Does the new Prompt Payment Code overhaul mean you’ll get paid in 30 days?
20 January 2021

Does the new Prompt Payment Code overhaul mean you’ll get paid in 30 days?

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter