Disputed Employer PAYE Charges: Correct Your HMRC Tax Bill

CREATED BY ROGER EDDOWES Published: 01/09/2025 @ 09:00AM #employer paye charges #PAYE #HMRC #Payroll #TaxCompliance #NationalInsurance

Did you know it's possible to challenge employer PAYE charges, identify payroll mismatches, and correct your HMRC tax bill? My blog post outlines what information to gather and how HMRC will respond to your dispute ...

Employer PAYE charges, Tax burden heavy and steep, Employee's sweat paid

Every so often, a business opens its online account and finds employer PAYE charges that feel out of step with reality, and the first instinct is to wonder what went wrong. The smart move is to pause, look under the bonnet of the payroll, and align what the software says with what HMRC has onrecord.

A calm review always starts with facts, not guesswork!

And that's because a PAYE dispute is nearly always the result of a data mismatch rather than a policy mystery. Verify the payroll year-to-date figures for Income Tax, employer and employee National Insurance, student loan deductions, and any Class 1A entries, ensuring they align with the submissions intended for HMRC.

Before contacting anyone, confirm the basics that anchor the account, including the PAYE reference, the Accounts Office reference, and the business UTR, because accurate identifiers cut through noise. Also note the number of employees, as headcount can reveal a missed starter, an unclosed leaver, or a duplicated record, which can result in an inflated tax bill.

It is helpful to compare what the payroll software reports in Full Payment Submissions with what actually leaves the bank, as a late or duplicated FPS can skew employer PAYE charges. Look for common slip-ups: a pay run posted twice, a correction sent without year-to-date totals, or an adjustment made in software, but never submitted.

When the internal audit does not reconcile, escalate by using HMRC's online help to dispute the figure and request support. If you sign in with Government Gateway, enter the references and provide the software's totals exactly as shown on the screen, as copying numbers from the business tax account can perpetuate the mismatch.

If more than one tax year is affected, file a separate request per
year, as this will make the resolution faster!

Then watch for the acknowledgement email and keep the reference handy. HMRC typically responds by phone or email within a set timeframe to review the FPS details.

A concise, structured explanation always speeds up results, so outline what changed, when it changed, and which pay periods are affected. Include any corrections already sent, the payroll version used, and whether student loans or benefits in kind were updated, because these often drive employer PAYE charges higher than expected.

While waiting for contact, avoid sending speculative duplicate submissions and instead prepare to file any needed adjustments precisely once. Remember that careful dating of revisions, along with precise year-to-date figures, prevents a small PAY dispute from rippling into the next period's calculations.

Of course, the longer game is prevention, so lock in a month-end checklist:

• Reconcile payroll to the bank
• Review variance reports
• Close leavers the day they depart
• Test FPS totals against the software summary before pressing send

Keep an audit trail so any future questions can be answered in minutes, not days.

A dispute is not a drama when handled methodically, and with the correct references, accurate figures, and timely submissions, HMRC can help correct the records and align the tax bill.

By treating payroll as a controlled system rather than a monthly rush, businesses can resolve today's PAYE dispute and stop tomorrow's employer PAYE charges from going awry.

Until next time ...

ROGER EDDOWES
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

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