HMRC have clawed back a record breaking £154 million in a tough crackdown by tax inspectors.
According to accountants UHY Hacker Young the recent tax compliance investigations on construction has yielded a 17% increase in revenue which is more than double that of five years ago.
These latest figures are the result of HMRC clamping down those self-employed who find their work through intermediary companies.
April 2015 saw the introduction of employment intermediaries having to provide quarterly reports with an explanation as to why there were workers on their payroll not using PAYE.
Roy Maugham, tax partner said: “The increased yield from tax investigations and the new rules indicate just how much HMRC are clamping down on tax evasion in the construction industry, and this trend is likely to continue in the future.”
“The construction industry is seen as an easy target by HMRC and has been subjected to increasingly intense investigations in the last few years.”
He gave a warning on the importance of keeping paperwork that can prove the individual has self-employed status or a sub-contractor certificate.
“Individuals and companies working in the construction industry must make sure that they have all the relevant paperwork otherwise they risk a high penalty from HMRC.”
Companies failing to provide the correct paperwork run the risk of having to pay up to six years’ worth of PAYE Income Tax and National Insurance Contributions as well as interest and the possibility of up to 100% of the tax in additional penalties.
Comment
Although this is about the construction industry the warning is clear to anyone who operates through an intermediary company, know your correct tax status.
