Individual taxpayers have traditionally been told that when it comes to tax returns, they're on their own. They need to submit their tax returns on time and their employer does not need to get involved. Despite the employer making payment of PAYE (the majority of their tax liability) on their behalf, after handing over their PAYE5 detailing this payment they resume business as usual. The employee is left to navigate the ever-challenging tax system on their own, without any assistance. Fortunately this attitude is changing as more companies recognise the benefits of helping staff with their tax matters.
For the employer, there are several positive incentives to ensuring tax compliant employees. Firstly, any loss in productivity suffered as employees stress over the submission of their returns and organisation of their tax affairs - particularly on the final tax deadline day each year - would be recouped. Some employers even provide a dedicated "Inland Revenue day" for this purpose, an entire day off to visit Inland Revenue in person. By providing an effective, outsourced tax assistance solution this becomes entirely unnecessary. Along with the stress felt by employees come numerous requests for help made to HR and payroll departments, neither of which have the training or time (or patience) to assist with individual concerns. Additionally, no employer wants to receive a call from Inland Revenue reporting a non-compliant employee and then ordering that a part of their salary be paid over to them (an option that Inland Revenue can deploy). Not only does this interfere with the pay run, but trying to explain this to an employee through proper counselling could prove difficult as there are often disagreements with Inland Revenue that take months to resolve and can be costly. Often non-compliance issues result from a simple misunderstanding of the tax return, but the consequences can become messy for employers if staff then request loans to cover shortfalls in their salaries, for example. More serious non-compliance issues could also mean there are other less obvious financial issues pending which could ultimately affect the employee critically.
In today's competitive financial environment with companies trying to keep costs down whilst trying to breed loyalty and retain talent, it makes business sense for the employer to get more involved in their staff's tax affairs. With more and more employers prioritising staff wellness packages including counselling, financial advice, medical check-ups and even massages and discounts on gym access, there is a movement to keep staff happy and healthy. Studies show that completing one’s annual tax return can be as stressful as enduring a divorce or moving house. In light of this, assisting with tax compliance is of immense value to the individual workers who make up a company. Despite most companies not helping in this way, most staff members would very much welcome some form of tax assistance.
In the long run, effective outsourced assistance programmes that help employees do their returns on time have benefits for staff as well as their employers, not to mention being a potential tax deduction in itself. Suddenly helping staff with their taxes isn't win-loss anymore, it's win-win.