Jessica Fino 12 Feb 2018 12:43pm

HMRC collects extra £819m from payroll investigations

HMRC has raised £819m in additional tax from its payroll investigations in the last financial year, a 16% increase on 2015/16

Pinsent Masons also said the Revenue managed to generate £503m in extra tax from large businesses, up 31% from one year earlier.

According to the firm, HMRC has recently stepped up the intensity of investigations into businesses that it believes are using “hidden employees”.

It also said the government has called for HMRC to look at such businesses.

Paul Noble, head of tax investigations at Pinsent Masons, said, “HMRC has made no secret of its suspicions of how companies classify their workers. Considering the scale that the gig economy has grown to, it is no surprise that it is now under intense scrutiny by HMRC.

“As well as its broader brush investigations in which HMRC aims to collect millions at a time, it is also combing carefully through the minor details of payroll. Even the most trivial of expenses are now being investigated.”

Meanwhile, the firm found last month that the average length of time it takes the Revenue to investigate the country’s largest businesses has stretched to 34 months.