Once a boy scout, always a boy scout – be prepared (and make sure your colleagues are too)

I am not a fan of big surprises, whether a blind date or a birthday party, I enjoy the preparation and anticipation - something I miss out on if things are sprung on me. This also extends into my work. As a consultant I am comfortable being thrown in at the deep end and thinking on my feet, however given the opportunity, when something is new and a fairly big deal, my mantra (possibly from my days as a boy scout) is that it pays to be prepared.

I am seeing a lot of clients receiving letters from HM Revenue & Customs asking for an informal meeting to “get to know them better”, and to gain an understanding of their Employment Tax compliance. This transparency is generally a good thing and having an open and honest relationship with the tax authorities is something to be encouraged, but it is always worth “being prepared” and being able to tip the balance in your favour.

When a lot of HR teams see the phrase "HM Revenue & Customs" or "tax" on letters they are often swiftly delegated towards the finance or tax team, however it can pay to take more than a passing interest.

HMRC's "Know Your Customer" initiative (or KYC for short) expands the focus – with the authorities increasingly asking for HR representation at employee compliance reviews into PAYE as well as the traditional finance or tax person. This highlights the increasing importance of people-related policies and practices around reward, retention, incentives and recruitment. – which will require fairly detailed explanation - whether letters of assignment for international expatriate moves, employment status of contractors and agency workers, details of termination of employment or the approach to compensation and benefits.

And where policies are outdated or there is a disconnect between teams, whether in terms of understanding or actual policy, it would be a good idea to take some time out to consider updating them. Equally, it is all very well having a robust policy, but there is little value to it when staff are generally are not aware of it or it is not followed in the spirit intended.

Consulting with those with experience of these meetings and being able to adequately prepare for the kind of questions that HMRC may ask on the day, will ensure that those who are participating in the KYC meeting can best represent their employer as well as benefit from it themselves.

There’s nothing worse than coming out of an exam wishing you had revised harder or more broadly. 

Remember the boy scouts and girl guides motto “be prepared” and make sure your colleagues do the same, otherwise you risk tying yourself in a knot that is often difficult to unravel - something else the scouts taught me!

PwC routinely advice clients on all aspects of employment tax, workforce related issues and benefits in kind. We can help you understand the Know Your Customer process and advise on the areas where you need to be prepared for as well as discussing employment tax generally and highlighting possible alternatives to your current approach to employment tax compliance.

Follow me on Twitter @UKEmploymentTax

Jonathan Berger | Senior Manager
Profile | Email | +44 (0) 207 804 1103


More articles by Jonathan Berger