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HMRC's Construction Sector Compliance Work Yields Results

by Robert Lee, Tax-News.com, London

08 December 2014


HM Revenue and Customs's (HMRC's) efforts to make UK construction companies bring their workers in-house under the Pay-As-You-Earn (PAYE) tax system have yielded a seven percent increase in revenue, according to chartered accountancy firm Haines Watts.

According to the firm, HMRC task-forces have recovered more than GBP130m (USD202m) by challenging companies that pay their workers as self-employed persons when these persons should instead be on their books as PAYE employees. From April 2015, companies will be legally obliged to provide quarterly reports demonstrating why workers on their payroll are not using PAYE.

Partner Des Veney said firms that fail to comply face fines or lengthy investigations by HMRC. "The new legislation that has been put in place by HMRC to target tax-evading construction workers is by far the toughest yet. Due to the erratic nature of subcontracted work, this can lead to paperwork errors, which will cause an incorrect tax status," he said.

"In order to safeguard workers, it is essential that construction companies, employment agencies and contractors ensure that their tax arrangements are suited to the new legislation. Otherwise as well as being issued with a hefty fine, workers may also lose the flexibility of their employment."

TAGS: compliance | tax | business | tax compliance | employees | United Kingdom | payroll | tax authority | contractors | legislation | HM Revenue and Customs (HMRC) | revenue statistics | construction | penalties | HM Revenue and Customs (HMRC)

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