PAYE Inland Revenue Inspection...can anyone reassure me?(5 Posts)
I just wondered if anyone has experience of a PAYE/Contractors Inspection. I work for a small company within the construction industry so have to do CIS aswell. We have been advised that we have an inspection in October. I am self-taught and the directors are useless at keeping their mileage/expenses so have ensuing battles. I am now really really worried about what to expect and it is months off. We have an accountant who will help but to be honest he leaves most of it to me. It is really bothering me?
Can anyone reassure me? We have had a few late payments for PAYE (cashflow issues) and I know that we may be issued a penalty or interest charge but this isn't my fear. If they find a problem do they give you time to sort it out or review again etc
Don't worry, the inspectors know that you are only doing your job and as long as you try and give them everything they ask for, or explain why you haven't got something they ask for, they should be pleasant, professional and understanding.
There are some useful pointers here, although not much in relation to CIS. With CIS, apart from the obvious (checking you have copies of in date CIS cards, the right ones for the payments you are making etc.) they are looking for subbies who may be avoiding tax so expect them to cross-check some payments with their records of your subbies. They will also look closely at the amount of materials on payments made with deduction of tax to check the amount of 'labour', and therefore tax, is not understated. This also applies to payments you are receiving, so they will check your receipts from your main contractors/employers too.
Late PAYE payments will incur interest, but they already know about those so that is not what they will be looking for.
If they find a problem, they will try and work out how much tax should have been collected that hasn't been. They will then issue an assessment on the company for this amount. Your accountant should then argue with them until a more reasonable figure is reached .
I am going to stop there, because I don't want to worry you unnecessarily - remember it is your company's directors responsibility to pay the right amount of tax, not yours, and because hard working managers don't usually prioritise admin., it is impossible for you to produce information you don't have.
Sorry, just got back to this. Many thanks for your reply it is very helpful.
I am still worried sick however The company I work for is very small but has reasonable turnover (4m). We had a system crash last year and so as to get by I paid employees their approximate weekly/monthly wage for a couple of months whilst I re-input. Therefore we have a couple of months where salaries dont exactly match the calculated figure, however, overall they do iykwim as I corrected later on. The same goes for sub-contractors, although there appears to be one or two invoices I may have missed meaning a deficit of about £2k over the year. My plan is to work out exactly what we might have short paid by and correct now.
I have given up with expenses as these are mainly directors and they can fight their own battles. Arggh, it is so frustrating as I just didn't have the means or time to do my job properly but any other year and I know we would have been just fine
Sounds like you have had a nightmare. The best policy ime is honesty but don't volunteer extra information unless asked for! If it comes up, I would be open about the system crash and how you dealt with it. If the payroll is correct overall for a tax year, there shouldn't be an issue. If you can, get everything reconciled in advance, so you are armed and ready for questions.
If you have questioned the director's expenses during the year (ie asked for missing receipts etc), and tried to keep them on the level, then as you say they can fight their own battles.
Thank you, yes, we are thinking about asking our computer support for a letter of confirmation that we did have a system crash. I think we have invoices relating to time spent on the repair so I might dig those out as evidence anyway.
I guess I need to speak to the accountant but he tends to make me even more worried lol
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