In a significant development, all Police Forces have recently received letters from HM Revenue & Customs (HMRC), initiating an employment status campaign aimed at examining the classification of their Forensic Medical Examiners (FMEs) and other staff not currently listed on the payroll.
The letters issued by HMRC underscore their concern that certain FMEs should be reclassified as payroll employees. This reclassification is based on criteria such as the need for personal service, the existence of a control framework, and minimal financial risk associated with the roles. Past reviews by HMRC have revealed instances where such reclassification is necessary.
Police Forces must reclassify FMEs and other non-payroll workers
Under the HMRC employment status campaign, Police Forces are now tasked with evaluating the employment status of their FMEs and other non-payroll workers for both the current tax year and the previous six years, potentially extending back to 6th April 2017. HMRC’s communication outlines that Police Forces should communicate via email to disclose reclassification decisions or provide reasons why they believe FMEs and other non-payroll staff should not be added to the payroll. The letters, issued on 1st August, impose a tight 30-day window for an initial response, beyond which HMRC will initiate a formal compliance check. The letters are accompanied by standard Compliance Check information sheets.
HMRC gives Police Forces 30 days to respond
It is important for Police Forces to respond to HMRC’s employment status campaign within the 30-day deadline. Failure to do so could result in a formal compliance check, which could lead to fines and penalties. The letters have been addressed to Payroll and Pensions or in some cases, just the force itself, so many relevant personnel in Police Forces may not have seen them yet.
PSTAX provides expert guidance to Police Forces
We understand that dealing with this information request will present difficulties for some Police Forces and we strongly recommend that you take professional advice from us. Our expert team has extensive experience in helping organisations comply with HMRC regulations and can provide expert guidance on how to assess the employment status of FMEs and other non-payroll workers. We can also work with HMRC to request an adequate period of time to carry out a full review.
This is the second strike in what looks to be a concerted campaign by HMRC in its war against off-payroll workers. Their first strike was against Local Authorities last year, though the approach then was much more even-handed and educational: there was no presumption of guilt and Authorities were asked to view the letter as an opportunity to take stock and put things right for the future. In this instance, as it is compliance activity, Police Forces are under considerable pressure, with just 30 days to respond to the request.
How to comply with HMRC’s FMEs employment status campaign
To comply with HMRC’s employment status campaign, Police Forces must:
- Carefully review the letters from HMRC and understand the requirements of the compliance campaign.
- Assess the employment status of all FMEs and non-payroll workers across the last six years using the criteria set out by HMRC.
- Make reclassification decisions or provide reasons why all FMEs and other non-payroll staff should not be added to the payroll.
- Communicate the detailed information HMRC has requested about the workers:
- Names, addresses, NI Numbers, Job titles, Start and end dates and total pay.
PSTAX can support you by taking these steps, agreeing a reasonable timeframe, ensuring your compliance with HMRC’s employment status campaign and avoiding the risk of fines and penalties.
For personalised assistance and consultation, we encourage Police Forces to reach out to us without delay. Time is running out and your proactive response is crucial in addressing this HMRC initiative effectively.