What happens during an Employer Compliance review?

Unlike other HMRC enquiries, the inspectors will usually wish to conduct the review at your business premises, although you are under no obligation to agree to this and can arrange for the review to take place elsewhere instead. Meetings will typically be attended by two inspectors, although this can seem intimidating, it is often done simply to ensure the review is completed quickly.

Typically, a review begins with a lengthy interview with the person(s) who deal with the business finances and payroll, and is designed, in part, to help HMRC understand more about how your business operates and also so the inspector can assess the controls and checks that you have in place.

Once the interview stage is completed the inspector will move on to examine a sample of your business records. This will usually be from a period within the last 12 months. The Inspector may ask for copies of your payroll (either physically or on a computer disc) so that the checks may be undertaken later back at their office; this is usual and should not pose a problem.

At the end of the record review the Inspector will normally conclude by asking a series of questions regarding any contentious or unresolved issues. Care should be taken at this about answering questions without first seeking professional advice; once an answer has been given (even in good faith) it often difficult to change later if the answer was based on poor recollection, misunderstanding, or a mistake. A letter summarising the outstanding points, together with copies of a note of any discussions had, should be provided by HMRC shortly after the meeting. As with all Notes of Meeting these do not have to be signed and returned as an accurate record, but any obvious omissions or discrepancies should be pointed out in writing.

It should be remembered that an Employer Compliance review is limited in scope. The Inspector should not be discussing the business accounts, personal tax returns or matters which have no bearing on wages or benefits, such as sales.

Do you still have questions? Get in touch with our employer services team to find out more about how they can help you.

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