HMRC to Tackle PAYE Dodging Employers
Misbehaving employers will be treated more sternly from April, as HMRC is given new powers in dealing with PAYE and National Insurance contribution (NIC) dodging workplaces.
Until now, an employer that was guilty of deducting tax off of employees but then failing to pass it on the government money to HMRC, could choose to become insolvent instead of paying the fee, setting up a new (phoenix) company quickly after.
From 6 April, any employer considered to be a security risk – based on the amount of tax at risk and prior employer behaviour; among other factors - will be required to stump up a security. The amount expected will vary, on a case by case basis and will be in the form of either a cash deposit from the business or director, or a bond from an approved financial institution.
An opportunity to appeal the decision will be available but otherwise failure to pay the security will make an employer liable for prosecution, with fines of up to £5,000 enforceable by the courts.
The new power will be similar to that successfully used for VAT, insurance and environmental taxes, though HMRC admits to being uncertain as to the number of employers this new power will affect.