Domestic Employment Tax services

Employment related taxes account for more than 50% of the total tax take in the UK and are often also the biggest area of risk for employers.

Over the last few years, we have seen increased regulation around pay matters, particularly given the increased focus on the Social aspect of the ESG agenda. Plus, with significant reputational risks, getting pay correct and compliant is increasingly important.

How we can help

Employment status

Following the introduction of the off-payroll working (OPW) rules in the private sector (in 2021) and public sector (in 2017), HMRC began with a light-touch approach to compliance enforcement. However, high-profile cases suggest that HMRC are taking a tougher stance when enforcing compliance.

Private sector users of contingent labour should take note of HMRC’s approach which will likely be a model for enforcement in the private sector. With case law constantly evolving it is important for engagers of contractors in both the public and private sectors to consider how they approach assessments and whether their processes need to be updated for recent developments.

Finally, employers need to be aware of how their engagements of contractors and off-payroll workers impact their compliance with both Senior Accounting Officer (SAO) and Corporate Criminal Offences (CCO).


Our disputes experts cover all aspects of engagements with tax authorities. Within our employment tax practice, we support clients in all aspects of engagement with HMRC and overseas tax authorities.

If clients are under HMRC enquiry, responding to a HMRC request, seeking clearance, investigations under Code of Practice 8 and 9 or making formal disclosures to HMRC, our disputes practice has the experience to advise and work to achieve a successful outcome. We can make detailed representations to HMRC to manage disclosures and mitigate penalties along with advising and representing clients in relation to Tax Tribunals.

Recent engagements include supporting clients with CJRS enquiries, IR35 status disputes and detailed reviews of arrangements relating to relevant mileage expenses and salary sacrifice in light of the latest case law.

Employee benefits

Electric vehicles

The UK Government is committed to ambitious climate action. Aware of the impact of fossil fuels on its ability to achieve its targets of net zero carbon emissions, the UK Government has pledged over £2bn in grants and funding towards the promotion and use of pure-electric (EV) and ultra low emission vehicles (ULEVs).

The income tax treatment of electric cars and ULEVs is more beneficial for both the employer and the employee than petrol/diesel vehicles. Employers are increasingly introducing EV & ULEVs via salary sacrifice arrangements in order to increase their employees’ take home pay and reduce costs to the business. The roll out of a ULEV fleet helpfully drives organisations to achieve sustainability, enabling organisations to set ambitious ESG targets which can help drive their long-term growth. It is important that employers consider the cost, risk and operational challenges and that all of the tax and regulatory considerations have been factored in before launching these very popular arrangements.

Salary Sacrifice

The cost of living crisis means that employers are increasingly looking at salary sacrifice arrangements to maximise the value that benefits deliver to their employees. While the concept of salary sacrifice may seem straightforward it is important that it is both correctly designed and communicated if the employees are to benefit and the employer avoid any unnecessary costs or operational challenges.

Construction Industry Scheme

The Construction Industry Scheme (CIS) is a reporting and withholding scheme which involves deductions at source from certain payments that relate to construction work carried out in the UK, including UK territorial waters.

Whether or not a business is based in the UK, the CIS covers all construction work carried out in the UK on buildings and structures and is very wide ranging. It includes, for example, site preparation, demolition, alterations, dismantling, construction, repairs and installation of buildings and structures, and engineering work such as roads and bridges.

Businesses struggle with the complexities of the CIS, from understanding what services fall within the scope of the CIS, the implications of mixed contracts, registration timings as a contractor/subcontractor, compliance requirements and how to obtain a refund of deductions suffered. Understanding the requirements can be onerous, particularly for non-UK businesses, and a failure to follow the rules can result in significant penalties.

We provide a range of services to help businesses overcome these complexities, including registration, monthly compliance, application for gross status, refunds, CIS health checks and HMRC reviews.

Compliance outsourcing

Compliance is not just a cost of doing business. Businesses must keep on top of an ever changing environment, evolving regulatory demands and organisational disruption to remain compliant. Outsourcing some or all of the compliance is an effective way of managing internal resources, improving risk management and minimising cost leakage.

Driven by data and enabled by technology and technical expertise, we are transforming compliance into a forward looking, strategic activity that enables organisations to gain a competitive advantage. Each data point tells a story and our approach to compliance proactively turns that data into meaningful insights to inform decision making.

We can help you to manage your tax compliance obligations by creating a more efficient and transparent process, allowing you to:

  • Manage tax risk more effectively.
  • Reduce costs and increase efficiency.
  • Improve the confidence in, and value extracted from, your tax data and outcomes.

Our support will equip you to meet all of these requirements in a robust way that is built to withstand change, is globally consistent and provides clients with peace of mind.

PSA automation

We combine our deep tax and technology knowledge to efficiently deliver robust and accurate PSA analysis. We are able to support outsourced PSA analysis or licensed technology to allow clients to complete their own analysis. We are also supporting clients with global employee expense analysis, where our technology is being applied ‘out of the box’ across 10+ jurisdictions.

We have experience of using the best new technologies to deliver results for our clients. This includes Machine Learning; image reading technology (OCR); API technology; geo-spatial analytics and cloud technology.

P11D services

Preparing P11Ds can be a time consuming process to gather data from stakeholders and ensure accuracy in final analysis especially where a wide variety of benefits are being provided.

We are able to offer a full suite of P11D services and can provide outsourced P11D support, where we combine tax technical advice with efficient processing to deliver robust and accurate P11D returns.

Our technology validates data, maintains an audit trail and prepares accurate and compliant P11D forms. We can also provide clients with technology solutions that can be built into existing processes and HR systems that allow end-to-end processing of P11Ds within current systems.

Contact us

Debra De’Ath

Debra De’Ath

Director - Reward & Employment, PwC United Kingdom

Tel: +44 (0)7711 776129

Matt Bridger

Matt Bridger

Director, PwC United Kingdom

Paul Dixon

Paul Dixon

Director, PwC United Kingdom

Tel: +44 (0)7843 327734

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