Revenue attack costs construction industry £26m

Further information has been issued by the Revenue and also by the Construction Industry itself. It appears that the Revenue's attack on the industry is biting harder than at first thought. Carl Whittaker of Qdos Consulting examines the current situation.

Carl Whittaker writes:

Carl Whittaker The Revenue confirmed that of the 57,000 letters they issued in August last year, 13,000 were issued to contractors and they had conducted 4,300 follow up visits. It is estimated that these visits resulted in the collection of £26 million extra tax following the re-classification of self-employed workers to employees.

The Revenue has also confirmed that they will be issuing a further 13,000 letters to contractors next month and we can therefore expect at least another 4,300 visits in the near future.

Among all the various checks, the Revenue is checking particularly to see if the workers are registered for VAT, purchase materials, have public liability insurance and operate a business bank account.

It is also thought that some major concrete contractors are considering moving all their workers to PAYE.

We believe that some companies may be making a knee-jerk reaction without considering in detail the status issues of their workforce or discussing their own position with expert consultants in this field.

The two thirds who had letters in August last year and have not had a visit should not feel they are in the clear when the next batch of letters is issued next month. They will still be on the Revenue's list, which will be increased by 13,000.

The Revenue's newly created Construction Industry Compliance Teams will continue their review of all companies who have been highlighted as possibly failing to comply with the PAYE regulations and deduct tax and National Insurance from their workers.

The advice is, as before, that each company should review its own procedures, take professional advice, consult with their workforce and put in place documentation to prove to the Revenue that the contractual and working practices confirm the company's understanding of the relationship.

Carl Whittaker

Qdos Consulting