The payroll industry has long been shadowed by areas of malpractice, where certain companies do not prioritise the best interests of either clients or candidates. Recently, the HMRC (His Majesty’s Revenue and Customs) has begun to intensify efforts to track and terminate operations of rogue companies, making efforts to publicly identify them via online listings.
We advocate for greater accountability in this sector, particularly by suggesting that the Directors of these companies should be personally named and held responsible for their actions. This added accountability could serve as a deterrent against unethical practices.
One significant point of contention arises from the lack of clarity concerning the repercussions faced by client companies that engage with compromised payroll services. A recent case exemplifies this issue, where a client attempted to exit the services of a questionable payroll provider, demonstrating a degree of reasonable care. However, this action resulted in the client being pursued by HMRC amidst suspicions of tax fraud involvement. In such situations, the onus falls on the client to prove their innocence, which can be an arduous and expensive process.
Given the current climate, conducting thorough due diligence on any potential payroll suppliers is more crucial than ever. It is essential for companies to assess the integrity and compliance of the suppliers they choose to work with to mitigate risks.
As of October 10, 2024, HMRC has added new entities to its list of named tax avoidance schemes, promoters, enablers, and suppliers. The most recent additions include:
For an up-to-date list of named tax avoidance schemes, promoters, enablers, and suppliers, please visit the HMRC website:
https://www.gov.uk/government/publications/named-tax-avoidance-schemes-promoters-enablers-and-suppliers/current-list-of-named-tax-avoidance-schemes-promoters-enablers-and-suppliers#signature-pay-limited
