HM Revenue & Customs have started to crackdown on payroll tax mistakes effecting many small businesses.
Many SME’s are unsure how to determine which payroll bracket their labour force might belong to. This is because many businesses use flexible workforces, casual labour or may operate as an umbrella company meaning that different areas of their workforce will fall into different brackets. It’s with this that research has found that errors made by operating SME’s accounts for over half of the additional £737m collected by the tax authority following the crackdown.
With payroll being an extensive operating costs for all businesses, some businesses will operate their payroll themselves rather than outsourcing it, and it is the complexity of the tax system implemented by HMRC that can cause businesses to make errors.
There are a number of reasons as to why SME’s have found themselves in the situation where they are having to pay more in tax penalties and some of this can be attributed to genuine errors. It could be said that SME’s do not have the resources and finances available to receive advice on tax issues and this could result in them being at a higher risk of making mistakes when it comes to filing complicated employer compliance tax returns.
If payroll is an area of your business that you are unsure of and want to avoid the risk of having to pay tax penalties if investigated contact Stafford & Co. Stafford & Co has a complete payroll bureau that can carry out all necessary PAYE requirements for you no matter your number of employees.