HM Revenue & Customs (HMRC) is offering specialist advice to builders and other construction businesses using outside suppliers to source casual staff, to help them appoint labour providers that operate within the law.

HMRC is doubling the number of specialist officers cracking down on labour providers who fail to pay tax. The extra 100 officers will offer free health checks to builders and construction businesses to help them use legitimate labour providers and tackle fraud within the industry.

They are expected to bring in an additional half a billion pounds of tax across all business sectors over the next four years. Labour providers found guilty of tax evasion could face jail.

David Gauke, Exchequer Secretary to the Treasury, said:

“This government has invested £900m in HMRC to crack down on people who break the rules.  Expanding these teams will help make sure that we bring in the additional money that the UK needs. Labour providers who think they can exploit their staff and the tax system need to think again.”

Mike Eland, Director General, Enforcement and Compliance, HMRC said:

“Building on HMRC’s successful approach to tackling fraud in the labour provider industry, these teams will make it even harder for fraudsters.

“We will tackle fraud by those employers who don’t play by the rules and the organised crime gangs who exploit their workers.  We will also work collaboratively with labour users and businesses in these sectors to help them use legitimate providers. This will help to create a level playing field for compliant businesses to compete in the market place.”

Labour providers found guilty of tax evasion face custodial sentences, confiscation of their assets and further sanctions such as Financial Reporting orders and orders banning them from becoming company directors.

Sectors such as construction where there is a demand for flexible, casual or seasonal workers are at risk from non-compliant labour providers.

The main compliance problems in these sectors are:

·         bogus supply chains;

·         repeated liquidations to avoid paying debts;

·         failure to keep business records;

·         VAT registration applications from bogus traders;

·         failure to submit VAT returns;

·         failure to make a return of income and gains; and

·         failure to pay National Minimum Wage and operate Statutory Sick Pay.