ECH7045 - Commencing the Compliance Check: Importance of the Talk Through and Systems Template

The talk through is a vital part of the compliance check as it is the opportunity to gain an understanding of the employers/contractors business and the systems in place to enable the business to function properly, and enable the employer/contractor to meet his statutory obligations.

It also gives an employer/contractor the opportunity to disclose any problems at an early stage in the check.

It is important that the talk through is conducted with

• the owner, partner, director or company secretary because they will have the knowledge of the business, and if applicable
• the appropriate person(s) with the knowledge of the systems in operation.

During the talk through you should obtain a full description of

• the business (what it does and how long it has been operating, the number of locations, the size and nature of the workforce etc), and
• each system that the employer/contractor operates.

You must remember that

• there may be sub systems within systems, and
• a system still exists even if it has only been operated once, for example the transfer of an asset.

Before concluding the talk through you must give the employer/contractor the opportunity to disclose by

• giving the employer/contractor the opportunity to tell you about any matters that have not already been covered and
• asking the important question ‘have all payments to employees and directors been taxed, NIC accounted for and the payments entered in the pay records?' ( ECH7160).

The employer’s/contractor’s response must be recorded in the Notes of Meeting ( ECH7265).

You must record full details of each system on the Systems Template. The template is available via SEES together with help on its completion.

It is important to record exactly what records were seen during the course of a Compliance Check, what tests were applied and what was discovered.

When completing the Systems Template you should

• record a full description of each system and any sub systems in operation. The description should include the controls in place and any authorisation procedure used. Where appropriate examples should be given
• record full details of any potential risks presented by the system. The risks should then be carried forward to the Intervention Plan and Work Programme Template (if used).
• if following a Walk Through of the system no risk is present you should indicate this on the Systems Template.