--- title: Tax Enquiries on Payroll - does your business have protection? description: Complex tax laws covering the way staff get paid in the UK often lead to errors and tax enquiries from HMRC into staff payments and benefits.  image: https://blog.shorts.uk.com/hubfs/Stock%20images/Salaries%20and%20Bonuses.%20%20Tax%20Enquiries%20into%20payroll%20can%20be%20safeguarded%20against..jpeg --- [![Shorts_logo_White](https://blog.shorts.uk.com/hubfs/New%20Site%202018/Shorts_logo_White.svg "Shorts_logo_White")](https://www.shorts.uk.com/) [Blogs & News](https://blog.shorts.uk.com/) > [Payroll](https://blog.shorts.uk.com/topic/payroll) # Tax Enquiries on Payroll - does your business have protection? David Robinson - 4 November 2019 ###### Select topic - Please Select - [ Audit ](https://blog.shorts.uk.com/topic/audit) [ Business Taxes ](https://blog.shorts.uk.com/topic/business-taxes) [ Radius – R&D Tax Relief & Patent Box ](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) [ Corporate Finance ](https://blog.shorts.uk.com/topic/corporate-finance) [ GENUS Management Accounts ](https://blog.shorts.uk.com/topic/genus-management-accounts) [ VAT ](https://blog.shorts.uk.com/topic/vat) [ Private Client ](https://blog.shorts.uk.com/topic/private-client) [ Payroll ](https://blog.shorts.uk.com/topic/payroll) [ EOT ](https://blog.shorts.uk.com/topic/eot) [ International Taxes ](https://blog.shorts.uk.com/topic/international-taxes) ![featured image](https://blog.shorts.uk.com/hubfs/Stock%20images/Salaries%20and%20Bonuses.%20%20Tax%20Enquiries%20into%20payroll%20can%20be%20safeguarded%20against..jpeg) With a mind-boggling amount of tax law covering the way staff get paid in the UK, it is easy for employers to get things wrong, leading to an increasing number of tax enquiries from HMRC into staff payments and benefits.  In the UK, HMRC have the power to open an Employer Compliance Check, which allows them to look into the affairs of a business and check that payments related to employment are taxed correctly.   ## Not just salary and bonuses These checks don’t just cover salary and bonuses, they also cover benefits, pension contributions, Minimum Wage issues, and other aspects.  Due to the sheer volume of tax law governing staff payments, it is easy to see why employers get things wrong.  Common areas that lead to errors include: - Company cars - Fuel cards - The provision of other benefits – e.g. vouchers - National Minimum Wage issues – for example deducting the cost of a uniform or training - Salary exchange arrangements   ## Penalties for payroll errors There can be significant penalties if errors are identified, up to 100% of the underlying tax in some cases (although likely to be around 30% in most cases).  In serious cases employers can also be ‘named and shamed’ by HMRC, which can be severely detrimental to the business. As HMRC have access to more sophisticated data analysis, we are seeing more of these enquiries raised.  But rather than wait for HMRC to visit and identify errors, we are encouraging businesses to run an internal process to identify any problem areas.  By addressing these now and dealing with them, this can lead to cost savings down the line and significantly less hassle from HMRC.   ## Safeguard against tax enquiries into payroll We can undertake a shadow Employer Compliance Check to help identify any areas of weakness that need addressing, so that these can be resolved in advance of any real HMRC Employer Compliance Check.  Our [dedicated payroll tea](https://www.shorts.uk.com/about/team/?person_name=&department=payroll&position=)[m](https://www.shorts.uk.com/about/team/?person_name=&department=payroll&position=) look after businesses of all sizes; from those smaller businesses who simply prefer not to employ their own in-house team, through to large companies who choose to outsource their complete payroll solution to Shorts.  [Drop us a line ](https://www.shorts.uk.com/business-taxes/#contactform)and begin your journey with us today.   [![Contact us](https://no-cache.hubspot.com/cta/default/2442072/0e09363a-89a7-482c-9eac-7e7ce33cbf13.png)](https://cta-redirect.hubspot.com/cta/redirect/2442072/0e09363a-89a7-482c-9eac-7e7ce33cbf13) Other recent articles: - [Learn more about our professional fee protection](https://www.shorts.uk.com/professional-fee-protection/) - [Top tips for reducing your Corporation Tax](https://blog.shorts.uk.com/how-to-reduce-corporation-tax-15-top-tips) - [What is a holding Company?](https://blog.shorts.uk.com/what-is-a-holding-company) - [UK Employer's Guide to Statutory Sick Pay (SSP)](https://blog.shorts.uk.com/uk-employers-guide-to-statutory-sick-pay-ssp) ![author](https://blog.shorts.uk.com/hubfs/Team%20profile%20round%20images/David%20Robinson%20Round%20circle.jpg) #### David Robinson As a Tax Partner, I advise clients on all aspects of UK tax, ranging from business taxes, transactions and private client matters, helping to achieve the objectives and aspirations of businesses and their owners. [View my articles](https://blog.shorts.uk.com/author/david-robinson) Tags: [Payroll](https://blog.shorts.uk.com/topic/payroll), [Business Taxes](https://blog.shorts.uk.com/topic/business-taxes), [Professional Fee Protection](https://blog.shorts.uk.com/topic/professional-fee-protection) Share this on - - - [Questions? Get in touch with us](https://www.shorts.uk.com/contact/) ###### Tax Saving Guide 2026-27 Written especially for entrepreneurs and owner-managed businesses, this guide is full of planning ideas and tax risks to avoid. [ Download now ](https://info.shorts.uk.com/en-gb/tax-saving-guide) ![Tax saving guide 2026-27](https://blog.shorts.uk.com/hs-fs/hubfs/Tax%20saving%20guide%202024.jpg?width=375&height=465&name=Tax%20saving%20guide%202024.jpg) ###### Related articles ##### [Tax and your Work Christmas Party](https://blog.shorts.uk.com/tax-and-your-work-christmas-party) ##### [R&D claims and COVID Statutory Sick Pay rebate scheme](https://blog.shorts.uk.com/covid-statutory-sick-pay-rebate-scheme-sme-rd-claims) ##### [Overseas staff, visa fees and taxes: what UK employers must know](https://blog.shorts.uk.com/overseas-staff-visa-fees-and-taxes-key-factors-uk-employers-must-know) ##### [UK Employer's Guide to Statutory Sick Pay (SSP)](https://blog.shorts.uk.com/uk-employers-guide-to-statutory-sick-pay-ssp) ###### Latest articles [A case of aggressive tax avoidance: Glasgow Rangers Football Club](https://blog.shorts.uk.com/aggressive-tax-avoidance-affect-you) [What is VAT? - Complete Guide (Updated for 2025/26)](https://blog.shorts.uk.com/what-is-vat) [Ashgate Hospice Sparkle Night Walk 2026](https://blog.shorts.uk.com/ashgate-hospice-sparkle-night-walk-2026) [Stocktaking guide for UK businesses](https://blog.shorts.uk.com/stocktaking-guide-for-uk-businesses) [Supporting the Chatsworth Cascade for future generations](https://blog.shorts.uk.com/supporting-the-chatsworth-cascade-for-future-generations) [Deal of the Year win at Insider Dealmakers Awards 2026](https://blog.shorts.uk.com/deal-of-the-year-win-at-insider-dealmakers-awards-2026) [Football shirt Wednesday: Backing England in style](https://blog.shorts.uk.com/football-shirt-wednesday-backing-england-in-style) [Understanding lifetime trusts: the basics](https://blog.shorts.uk.com/understanding-lifetime-trusts-the-basics) [Close company directors face new HMRC detail requirements in 2026](https://blog.shorts.uk.com/close-company-directors-face-new-hmrc-detail-requirements-in-2026) [Shorts advise Harris Irwin Architects on successful growth funding.](https://blog.shorts.uk.com/shorts-advise-harris-irwin-architects-on-successful-growth-funding) #### About Us Use this little footer to reinforce your message about who you are and why people love working with you. 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