Stewie Griffin
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PAYE Investigation - Request for electronic records

PAYE Investigation - Request for electronic...

We've recently been informed that HMRC are opening an enquiry into a cleints PAYE.  They have asked (and then been quite insistent over the phone), that electronic payroll files MUST be submitted to them 2 weeks before their visit.

The payroll is produced in Moneysoft, so there's no problem with the data being available.  However, I've never received a request like this before.  Is it normal?  If so, how have other practioners dealt with it?  Do you just send them the files as requested or insist that they review on site.....

Maybe I'm just paranoid!


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By richnrg
21st Apr 2011 10:18

HMRC Audit file

(just in case you aren't already aware), within Moneysoft Payroll Manager you can click on 'Tools-HMRC Audit File' to produce a csv Audit file, which is probably what they are asking for.

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21st Apr 2011 12:37

Not really the question being asked is it?

I would be more concerned about giving HMRC untargetted information to allow them to go on a fishing expedition.

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21st Apr 2011 14:22


Thanks for the Moneysoft tip, could be useful.

Yes, I guess what I'm really asking is about the fishing element etc.  The client doesn't have anything to hide, so I'm not sure what electronic interrogation would accomplish...but still, I just don't trust 'em


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21st Apr 2011 15:02

Exceding their authority -

They have a right to print out's sufficient to cover whatever the subject of their investigation is.

They do NOT have the right to demand records in any particular format (including electronic) and I would certainly not supply them in that format in view of their insistance.  If they continue to insist file a formal complaint.


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By Big Ade
21st Apr 2011 21:55

PAYE Investigation - Request for Electronic Records
Suggest you look at S114 FA08 which is referred to in HMRC Manuals at EM2808 and CH13400. HMRC can ask for electronic records in the same way as they request paper records.

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22nd Apr 2011 10:46

Read more carefully

s114 Finance Act 2008 and both of the manuals you refer to give HMRC the right of access to computerised records in the same way they have access to physical records. That is, it allows them to request copies of "relevant documents" held electronically. It does not give them the carte blanche to have everything sent to them. To compare it to a physical inspection, would you think it reasonable for HMRC to ask you to send all cash books, copy sales invoices and purchase invoices prior to an inspection?

I also can't see anything in any of your references that allows HMRC to insist on the records being available 2 weeks in advance of an inspection as requested. They have the right to inspect documents and have copies made. They are coming to do an inspection so they can do that then. Demanding 2 weeks unfettered access to all the data sounds very much like a fishing expedition to me.

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By bduncan
22nd Apr 2011 12:00

What about the Data Protection Act

Surely there is something in the DPA that restricts you from sending the information, especially if requested by unsecure e-mail.

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28th Apr 2011 11:42

HMRC is fishing!

 Sounds like a fishing expidition. 2 weeks of trawling through records then compiling a large list of explanatory items. Bound to have someone say something then upon which they can pounce.

Clients may be clean but mistakes do get made and that is manna for HMRC who off course never make mistakes (ask them) and will penalise you as much as possible for a genuine human error.

Give the minimum with a smile and a bit of grovel and they mostly go away.


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28th Apr 2011 11:43

Richard Wynne

The answer may lie in para 6 (2) Schedule 36 FA 2008, rather than s.114:

"An information notice may specify or describe the information or documents to be provided or produced".

It would appear that HMRC can specify an electronic format if the information is contained within a computer file.

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28th Apr 2011 11:56

I'm not sure how they can logically insist on this

It is a requirement that accredited payroll software should be capable of producing the HMRC file for an inspection. (though in fact HMRC's specification of the file contents doesn't even cover all the real-world cases that are covered in their accreditation tests such as for example retrospective NI table letter changes)

However it is not a requirement that payroll software should be accredited, and an employer can use any software they like. So it isn't apparent to me how HMRC can insist on receiving something that the employer may not be able to produce. In this case the client *can* produce it if they know how, but how does HMRC know that in advance?

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28th Apr 2011 12:21

Requesting Computerised Records

EM10051 states that FA1988/S127 allows access to computer records.  HMRC's view is that the word 'document' is extended to cover computerised recods and as s127 defines 'document' as including anything in which information of any description is recorded, that means the pghysical object used to store the information.  HMRC then argues that could mean the actual computer or server as well as more common storage devices such as hard discs etc.


For CTSA only there is an extension  of the word 'information' because para 27  of FA 1988 allows HMRC to seek information in such form as you may reasonably require.



If you want to object do so on the basis of reasonableness.  Start by reading Taxation 19th October, 2006 - What is the big idea?

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