ECH7160 - Commencing the Compliance Check: Opportunity to Disclose
The question
- 'have all payments to employees and directors been taxed, NIC accounted for and the payments entered in the pay records?' or
- ‘have subcontractors been verified by HMRC before payment was made?’
is important because
- it gives the employer/contractor the opportunity to disclose irregularity and
- helps establish culpability if irregularities are discovered which the employer/contractor failed to mention.
You should
- insist on a straight 'yes' or 'no' reply.
If necessary you should
- repeat the question to ensure the employer/contractor has understood it and/or
- press for a specific response where the employer/contractor
- attempts to avoid the issue or
- fails to give a straight answer.
Where the answer is 'no' you should
- establish what the payments are for and the systems in place to account for the payments
- test the system and
- issue factsheet EC/FS 4 (penalties) provide HRA advice where appropriate, see ECH8027.
The employer’s/contractor’s response must be recorded in the Notes of Meeting ( ECH7270).
