HMRC yields £131m from construction following tax status checks

Tougher tax status checks from HM Revenue and Customs (HMRC) has seen a seven per cent increase in revenue from investigations in the UK construction industry.

Extra payments from builders, electricians and plumbers following tax queries by HMRC saw yields soar to £131m in the year to March 2014, up £10 million on the previous year.

The yield from tax compliance investigations in the UK construction industry is now at a record high and is nearly double that of five years ago, according to a recent Freedom of Information request to HMRC.

HMRC has also recently confirmed that as of April 6th 2015, employment intermediaries will have to begin providing quarterly reports explaining why workers on their payroll are not using PAYE (Pay As You Earn).

Graham Jenner, director of NoPalaver Group which specialises in the construction sector, said: "HMRC is ramping up its efforts to clamp down on tax evasion in the construction sector.

"It has long sought to force self-employed construction workers to be classified as employees and is now heaping the pressure on employment intermediaries in its effort to treat self-employed workers as employees for tax purposes.

"These changes to the rulebook make it even more important for construction companies, employment agencies and contractors to ensure their tax arrangements are in order and fully compliant with new legislation.

"Failing to comply with HMRC could result in a big tax bill and a loss of flexibility in employment, which is vital for construction workers."

Last updated: 20th October 2014