New staff may mean tax bill deluge
Concern is growing that small businesses could face unexpected tax bills as a result of the Inland Revenue taking on more than 1,200 new staff to tackle unresolved open cases.
Dubbed a ‘black hole’ of potential tax bills, experts believe SMEs will face tax bills they had not reckoned on as PAYE payment errors going back years are uncovered.
If an error is made in a PAYE calculation, and is made further back than the current financial year, it would be the employer, not the employee, who faces the liability.
Chas Roy-Chowdhury, head of tax at ACCA, said: ‘As far as any additional tax liability is concerned there needs to be some clear thinking about how it affects business.
‘It will be very unfair if business has to suffer.’
Reports today said the Revenue had cleared the employment of an extra 1,250 clerical staff to clear open cases which linger when tax collectors cannot resolve difficulties.
Some of the problems may have arisen when two Revenue computer systems – handling PAYE and National Insurance – were linked.
The NI system, Nirs2, has been dogged by problems and has run substantially over budget and behind schedule.
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