Rachael welcomed Fiona Godfrey, founder of Inicio HR in Coventry, into the studio to discuss a range of personnel-related topics, and Fiona began by highlighting some of the most common problems that arise when HR and payroll are out of sync.
“Salary changes, bonuses and adjustments to hours often happen without a formal approval trail or proper communication to the payroll team,” Fiona explained. “These gaps can result in overpayments, underpayments or even breaches of contract. The solution? Clear, documented processes that connect HR decisions directly with payroll deadlines, ensuring everything is approved, tracked and actioned in time.”
“Right-to-work checks are another area where many businesses fall short,” added Rachael. “It’s not enough to simply collect an employee’s ID: the correct documentation must be verified, recorded and stored before they begin work. Failure to do so can lead to fines of up to £20,000 per worker, not to mention the reputational risk of Home Office investigations.”
“Speeding up onboarding should never come at the expense of legal compliance,” agreed Fiona. “Contractor arrangements also pose a significant risk. Many businesses engage workers on a freelance or self-employed basis in an attempt to reduce costs, but if those individuals are managed like employees - given fixed hours, company equipment, performance targets or line management - it can trigger IR35 scrutiny. In such cases, the company may be liable for unpaid tax, National Insurance and penalties. Getting professional advice on employment status is no longer a luxury; it’s essential.”
Even well-intentioned employee rewards can become financial traps. “Gifts such as spa days, iPhones or holiday vouchers might seem like harmless perks,” warned Rachael, “but they can fall under P11D reporting requirements if they exceed HMRC’s ‘trivial benefit’ threshold. If these benefits aren’t declared properly, employers can find themselves footing an unexpected tax bill. Before offering incentives, it’s wise to confirm whether they’re taxable and ensure everything is correctly reported.”
Another growing concern for businesses is the use of AI in recruitment. While automated tools can help sift through CVs or match candidates to roles, they carry risks around bias, fairness and GDPR compliance.
“Relying solely on AI to make hiring decisions could expose employers to claims of discrimination or unfair treatment,” Fiona commented. “And as employment law evolves, the legal landscape around AI in HR is only becoming more complex.”
“Workplace inclusion is also under increasing scrutiny,” continues Fiona. “Supporting neurodiverse employees - such as those with autism, ADHD or dyslexia - is now a legal obligation, not just a best practice. Failing to make reasonable adjustments can lead to tribunal claims. These adjustments don’t have to be costly or complex; sometimes it’s as simple as offering alternative communication styles, providing visual tools, or assigning a support contact during onboarding.”
As Rachael summed up: “Throughout all of this, one message is clear: documentation is everything. From contracts and onboarding forms to disciplinary records and performance reviews, every HR-related interaction should be formally recorded. In the event of a dispute or data access request, the ability to produce clear, objective records can be the difference between a quick resolution and a costly tribunal.”
