Partner Article

Take care with PAYE, say experts

Businesses are being encouraged to take extra care over PAYE, or risk liability for their employees’ tax bills.

As many employees receive their tax bills for the year 2010/11, Graham Purvis from Robson Laidler is encouraging employers to ensure PAYE is correct, or risk being caught out.

He commented: “One common problem identified is the failure of employers to operate the correct tax code.

“Even though this may be because they have not realised it has changed, employers could still be responsible for footing the bill.”

If employers can show that they took “reasonable care” when working out employees’ PAYE however, payment can be collected from the employee.

Mr Purvis is now encouraging employers to inform their employees of any amendments to their tax codes before any changes come into place, especially if the code relates to the following tax year.

If any errors are spotted, then employers can correct them without asking permission of HRMC.

However, if this will result in a large tax deduction on one pay period, employers must contact HRMC and ask to operate PAYE on a “week1/month1” basis, thus protecting themselves from a potentially hefty tax bill.

This was posted in Bdaily's Members' News section by Ruth Mitchell .