Introduction to this document

PAYE compliance review checklist

If you receive a letter telling you that HMRC wants to carry out a compliance review of your payroll records, use our checklist in advance of HMRC’s visit to review your records so that there are no surprises on the day.

Prepare for a visit

HMRC has a legal right to inspect your payroll records to confirm that you are paying the correct amount of tax and NI. It sees these visits as a chance to make some easy money. Most PAYE inspections result in some mistakes being found and HMRC will often calculate the “lost” tax and NI over a period of four years plus the current year. This period may even be extended if it suspects that tax has been withheld on purpose. It may also seek penalties, although these will normally depend on the size of the error and how much the employer co-operates. Use the PAYE Compliance Review Checklist to help prepare for an impending visit.