KPMG is dealing with an administrative blunder that has resulted in some of its British-based employees receiving incorrect tax payment information.

The error is said to have occurred as a result of HM Revenue & Customs (HMRC) receiving incorrect documentation from a third party following the simplification of KPMG’s legal structure.

According to sources, the issue arose when KPMG transferred UK employees’ contracts from KPMG UK Ltd to KPMG LLP on April 1, a process that was supposed to have no impact on their terms and conditions.

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However, it appears that a clerical error was made during the process, resulting in the change being reported to HMRC as having taken effect from the 2023-24 tax year, which is still two years away.

Despite the mistake, a source close to the firm has assured there have been no incorrect payments made to staff.

KPMG is now working to resolve the issue, and according to insiders, it is close to finding a solution.

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This latest fiasco is separate from a payroll processing problem that KPMG encountered last week.

The issue resulted in KPMG staff receiving their April salaries several hours later than expected. However, ADP, KPMG’s payroll services supplier, was able to resolve the problem on Friday.

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The fact that such errors could occur in the first place, especially given the size and reputation of KPMG, is likely to be a cause for concern for the firm’s clients and stakeholders.

As one of the “big four” accountancy firms, KPMG is expected to have rigorous systems in place to ensure that its operations run smoothly and accurately.

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In recent years, the big four firms have faced increasing scrutiny from regulators and lawmakers, with concerns raised about their audit quality, conflicts of interest, and market dominance.

The current situation at KPMG is unlikely to help alleviate these concerns, and may even prompt further calls for the firm to be held to account.

In response to the recent incidents, KPMG said it is committed to addressing the issues and ensuring that they do not recur in the future.

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A KPMG UK spokesperson said: “We are very sorry to our colleagues who were affected by this issue from our provider.

“We will ensure that none of our people will be left out of pocket as a result.”

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