PAYE healthcheck ― outcomes

Produced by Tolley in association Susan Ball

The following Employment Tax guidance note Produced by Tolley in association Susan Ball provides comprehensive and up to date tax information covering:

  • PAYE healthcheck ― outcomes
  • The report / feedback format
  • Content of the report
  • Introduction and scope
  • Executive summary
  • Appendices
  • Full body of the report
  • Time limits for assessment and penalties
  • Time limits for assessment
  • What penalties can be charged?

PAYE healthcheck ― outcomes

Once the PAYE healthcheck has been carried out, the organisation will receive a report. This will detail the reviews undertaken, their findings, and make recommendations to improve the employer’s compliance processes. In many cases a written report will simply be a formal record of earlier presentations made to the employer on the issued identified.

As a result of the outcome of the review, changes may need to be made within the organisation.

As the healthcheck report is potentially disclosable (see below), if such changes are not made and the same issues come to light in a later HMRC compliance check, this will almost certainly lead to a greater level of penalties being imposed than if the shortcomings were only discovered at that later stage.

The report / feedback format

At the conclusion of the healthcheck, a report will be provided to the employer. The format of the report should be agreed before the start of the review and ideally detailed in the engagement terms.

Note that, once the employer receives a written report, it is a legally discoverable document in that it is not covered by legal privilege. In the case of R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another, the Court of Appeal ruled that advice about tax law taken from specialist tax accountants does not attract legal advice privilege. HMRC can therefore request to see the document.

The report may take the form of:

  1. a full written report on all areas reviewed

  2. a report covering only problem areas

  3. an oral presentation at a meeting

  4. a debriefing session including a power point presentation

In advance of issuing the report to the employer, the reviewer should confirm who the recipients will be.

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