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Kim Smith.
Kim Smith.-
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aarti2407
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Dear Ma’am,
“The payroll processing transferred to Coral Payrolls Co(external service organisation) from 1 January.
Errors may have occurred during the transfer process at the time of outsourcing.
There is a risk that the payroll charge and related employment tax liabilities are under/overstated.”Ma’am i do not get this last sentence correctly, relating to payroll charges and employment tax liabilities, like what exactly are they? and how do they get affected through a transfer process?
Appreciate your time and efforts:)
Kim Smith
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As at 31 December, to audit client has “run a payroll” and let’s say it pays all employees their net pay due on 31 December by bank transfer. But the tax and other deductions from the employees’ pay (e.g. social/national insurance) won’t be paid over to the tax authority until due (e.g. on the 14th of the following month – it doesn’t matter when – I’m making this up – it would depend on the jurisdiction).
All the answer is saying that depending on what is transferred, there could be mistakes – e.g. both the audit client and the service provider might pay the liabilities at the date of transfer – or neither (!)
aarti2407
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