Sloppy payroll racks up over £75 million in penalty charges for UK businesses


New data from HM Revenue and Customs (HMRC) obtained by MHR, the HR, payroll and finance expert, shows the drastic effect of incorrect or absent payroll reporting on the bottom line for UK businesses.

Penalty charges, issued by HMRC to firms who repeatedly infringe on payroll reporting requirements, total £75,154,200 since 2020. Over a quarter of this (27%) was issued in the last financial year alone (April 2022 to April 2023).

This is vital funding that could be put to better use elsewhere in the business, rather than paying penalties for issues that can be completely avoided by using automated technology. With many businesses still not using technology at all when it comes to reporting to HMRC, according to the same data obtained by MHR, the impact is clear.  

The news comes as National Payroll Week begins (4-8th September) showing the vital need to address such issues.

Anton Roe, CEO at MHR, comments: “The fact that UK businesses are paying HMRC well over £75 million because of sloppy payroll reporting is ridiculous and completely unnecessary. This can be easily avoided through the adoption of best in class payroll technology as it enables organisations to report in an accurate and timely way while reducing time spent on payroll by 60%.

Not only do employers save money by avoiding payroll mistakes, but they can also use technology to improve employee financial wellbeing, empowering them to take control of their income with options like early wage access or real time commission tracking. The knock-on impact of these changes can be huge when it comes to retention, saving even more money on recruitment and training. Leading your teams through uncertain economic times can be a monumental challenge, but quick and easy fixes like these can go a long way towards improving the health of your company.”

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