Complex PAYE & NIC Issues | HMRC PAYE Compliance & Employer Tax Advice UK

Complex PAYE & NIC Issues: Ensure Compliance with HMRC PAYE and Taxable Income Regulations

Understanding the tax and National Insurance Contributions (NIC) position of employment income in the UK has become increasingly complex. With HMRC PAYE rules constantly evolving, new legislation is frequently introduced to counter tax-saving opportunities, adding more layers to the already complicated PAYE system.

The Office of Tax Simplification has introduced several reforms to streamline tax processes. However, for every tax simplification, new PAYE compliance rules often follow. Employers must remain vigilant and ensure that all employee payments are taxed correctly to avoid penalties or errors in reporting taxable income in the UK.

Employers and HMRC PAYE Compliance

In recent years, the government has aimed to collect more tax revenue from employers, including a rise in Employer NIC rates and a stronger focus on tax investigations. From 6 April 2026, employers will be required to payroll most benefits in kind, reducing the administrative burden of the P11d process. However, this shift will require employers to review how payments are processed and ensure PAYE is accurately applied through payroll software or systems.

Common PAYE and NIC Compliance Challenges

Employers often face difficulties in several key areas, including:

PAYE and NIC on termination payments, shares and options
Taxation of benefits in kind and third-party benefits
Disputes over employment status and agency worker payments
PAYE obligations for expatriate employees
Processing PAYE for overseas staff not on the UK payroll

Failure to correctly manage these can result in over-taxing employees or HMRC penalties for underpayment.

Our Employment Tax Services

We offer expert advice and support across a wide range of employment tax issues, including:

Payroll and Real Time Information (RTI) reporting
P11d reporting and benefits in kind tax advice
HMRC PAYE audits and reviews
PAYE settlement agreements
Taxed award schemes and share-based payments
Termination payment tax reviews
Expense policy design and compliance
IR35 support and Construction Industry Scheme (CIS)
Form 42 and employment-related securities reporting
Senior Accounting Officer (SAO) compliance

HMRC PAYE Audits & Voluntary Disclosures

If you are facing an HMRC audit or have identified an error in previous PAYE or NIC payments, we can help. Our specialists have extensive experience in handling tax enquiries, resolving disputes, and negotiating settlements with HMRC. We also assist with voluntary disclosures where necessary.

Due Diligence for Business Acquisitions

Buying or merging with another business? We offer tax-focused due diligence services that evaluate payroll processes, PAYE/NIC liabilities, and any risks related to UK taxable income reporting. This ensures you are fully informed before completing the transaction.

If you would like to learn more about our other Employer tax services, visit this page.

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