For years, many business owners have treated payroll as a simple numbers exercise. You run it through your software, submit your RTI filing, and assume that’s job done. However, HMRC’s compliance approach is shifting. 

We’re seeing a clear increase in scrutiny around Real Time Information submissions, as HMRC is no longer accepting payroll filings at face value. They’re increasingly asking for bank statements to prove that the money actually left the company account.

In short, it’s no longer enough to say you paid someone, you may also need to prove it too.

The paper vs money gap

Under RTI rules, payroll must be reported on or before the day you pay your employees, including yourself if you’re a Limited Company director. The “payment date” in your payroll software isn’t just a label, it’s a legal declaration of the day the money moved.

If your payroll records show a payment on the 28th, but your bank statements show it happened on the 5th of the following month, you are technically in breach of RTI compliance.

HMRC is increasingly treating the bank transaction as the primary evidence.

Why is HMRC checking this now?

HMRC is using bank statement reviews to crack down on several areas:

Unsupported statutory claims

If you claim Small Employers’ Relief for Statutory Maternity Pay (SMP), HMRC may demand bank evidence to confirm the employee actually received the payment before issuing a refund. 

Director salary reclassification

Backdating payroll to cover money already withdrawn from the company, for example to resolve Director’s Loan Account issues, is a significant red flag.

Refund requests

If your account is in credit and you request a PAYE refund, HMRC is now frequently pausing these requests until you provide bank proof that the underlying salaries were genuine. With payroll journals alone no longer considered sufficient evidence.

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The risks of non-compliance

If your payroll filings don’t align with your bank transactions, the consequences can quickly become expensive.

1. Reclassification

HMRC may treat payments as “Director’s Loan” withdrawals rather than salary, leading to unexpected S455 tax charges.

2. Denied refunds

Refund claims for overpaid PAYE or statutory credits can be rejected or delayed pending further checks.

3. Penalties 

You could face fines for “careless” or “deliberate” inaccuracies in reporting.
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How to stay compliant (without losing sleep)

If you want to keep things clean, calm, and HMRC-proof, think “bank first, paperwork second”. Payroll can’t just be a tick-box exercise, you need to make sure the money moves in accordance with what you submit.

Here’s some tips to stay on the right side of it

1. Match the date. Every time.

The payment date in your payroll software should be the exact day the money leaves your bank. Not “close enough”, or “I’ll fix it later”, but the exact same day.

That way if HMRC ever looks at it, they’ll see that the RTI submission and the bank statements tell the same story.

2. Pay statutory amounts before claiming

If you’re reclaiming Statutory Maternity Pay or similar, the payment must have physically left the business bank account before you can submit the claim. 

This means you can’t claim it in advance and intend to pay it later, the payment actually has to have left.

3. Don’t try to rewrite history

Trying to label an old bank transfer as “salary” after the fact is hard to defend if you ever face an audit. HMRC are looking at timing, patterns, and evidence more closely than ever. If it didn’t walk like payroll at the time, it’s risky to pretend it did later.

4. Keep proper evidence

Hold onto things like evidence of MATB1 forms, entitlement calculations, and confirmation of payments alongside your bank statements. 

A payroll journal on its own isn’t considered strong enough evidence anymore. The paper trail needs to show:

• Entitlement.
• Calculation.
• Actual payment.

If all three line up then you’re solid. Payroll compliance isn’t about being perfect. It’s about being consistent and being able to prove what happened.

5.  Don’t panic if past payroll doesn’t align

If you’re reading this and realising that previous payroll dates didn’t always match your bank transactions, take a breath. What’s done is done. There is very little you can do retrospectively to “fix” historic timing differences. Attempting to rewrite past payroll records can create more risk, not less.

The important thing is what you do next. Make sure all payroll dates and bank payments match from now on. Keep clear evidence moving forward. Consistency over time is what strengthens your position.

If you’re considering making a statutory reclaim or requesting a PAYE refund relating to historic periods, be aware that HMRC may request bank evidence before processing the claim. If you cannot provide that evidence, the claim may be rejected. Understanding that upfront helps you make an informed decision about whether to proceed. 

For most businesses, this won’t become an issue. But if you do anticipate additional scrutiny, the safest approach is transparency, good records, and compliant processes from this point forward.

Make it match, make it defensible

Payroll compliance isn’t about being perfect. It’s about being consistent and being able to demonstrate what actually happened. If the money left the bank on the right day, for the right reason, and you can evidence it, you’re in a much safer place.