HMRC has published a guide on how to avoid payslip fraud, urging workers to “check that the tax and National Insurance shown on your payslip or deduction statement has been paid correctly if you’re an agency worker, temporary worker or contractor, or you work through an umbrella or payroll company”: https://www.gov.uk/guidance/how-to-avoid-payslip-fraud
Commenting, Dave Chaplin, CEO of IR35 tax compliance firm IR35 Shield said:
“HMRC’s new guidance appears to admit two uncomfortable things: firstly, that payslip fraud is happening and HMRC knows about it; and secondly, that it may be struggling to resource the enforcement needed to tackle it, because workers are effectively being asked to check whether their own tax and National Insurance has been paid correctly.
“Most workers will neither read nor fully understand this guidance. They reasonably expect their agency or payroll provider to get their pay right. The fact that HMRC feels the need to issue this advice suggests that confidence in the supply chain is misplaced.
“Isn’t it time outsourced payroll providers, including umbrella companies, were subject to proper, legitimate regulation, perhaps through a body with the authority and teeth of the Financial Conduct Authority?
“We saw with the Loan Charge how workers could ultimately be blamed when things went wrong. Where are the enforcement bodies that should be protecting them?”
Also commenting, Crawford Temple, CEO of Professional Passport, a leading independent assessor of payment intermediary compliance said:
“For some time now, I have been frustrated by HMRC’s lack of enforcement within our sector and, more importantly, its failure to make full use of the tools and data already available to it.
“HMRC has access to huge volumes of information through RTI and monthly intermediary reporting. Cross-referencing that data could provide significant intelligence, helping identify non-compliance, anomalies and businesses that warrant investigation. It is frankly ludicrous that this intelligence is not being used more effectively.
“For many years, we have seen a proliferation of legislation and regulation as policymakers try to keep pace with the changing world of work. Yet this catalogue of legislation has also created unintended consequences and failed to address some of the fundamental challenges facing the contracting sector and supply chain – particularly transparency, compliance and enforcement.
“Government has repeatedly ignored expert advice, and we are now seeing the consequences. This latest guidance effectively passes the responsibility to workers who simply want to know they can trust their agency or umbrella provider to get their pay right. That is not the worker’s job. HMRC needs to step up and fulfil its responsibilities.”
