COMPLIANCE
David Lynas, Employer Duties Lead – Guidelines for Compliance (GfC), and Melissa Kelly, Large Business Labour Supply Chains (LSCs) Subject Matter Lead, HM Revenue and Customs (HMRC), discuss the LSC risks a business could be exposed to and how payroll can help to identify those risks Help with labour supply chain assurance – Guidelines for Compliance
I n January, HMRC published its latest Guidelines for Compliance product: ‘Help with labour supply chain assurance (GfC12)’: (https://ow.ly/ pmma50VReis). The guidelines are aimed at larger businesses towards the top of LSCs. However, the general principles apply to businesses anywhere in such supply chains. These guidelines don’t replace existing HMRC guidance and publications. Rather, they’re designed to complement them and provide additional support to taxpayers. LSC risks: what could a business be exposed to? With the diversity of the UK labour market, businesses often use supply chains to engage labour through specialist services which support their operations, or for the provision of their own services to their customers. LSCs, particularly those that are larger,
“Businesses which are non-compliant can gain advantages which make it harder for legitimate ones to compete in the market”
higher value and more complex, can present multiple tax risks, including: l failure to correctly apply the rules for off-payroll working (IR35) and the construction industry scheme l tax avoidance l fraud. These risks can also affect workers. Businesses which are non-compliant can gain advantages which make it harder for legitimate ones to compete in the market. The guidelines highlight what businesses can do to reduce opportunities for non- compliance in their LSCs. We include key information about the risks themselves and how businesses, particularly larger ones, can incorporate recommended principles
and activities to strengthen their existing assurance practices to help mitigate risk.
Assurance practices: minimising opportunities for non-compliance Essentially, we want businesses to know enough about their LSCs, and how workers are engaged, to be able to make informed decisions about their level of risk exposure, dynamically, during the contract. As businesses, operations and practices are diverse, a checklist approach is neither meaningful nor effective. Instead, we provide practical examples, including the type of information and risk indicators which can help businesses understand chains and assess and manage risk.
| Professional in Payroll, Pensions and Reward | July-August 2025 | Issue 112 18
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