Employers and owners have a responsibility to check the identity of those they are paying and to keep detailed records of the checks made. Failure to comply can lead to loss of VAT input tax recovery for contractors/employers, loss of gross payment status for subcontractors, and the imposition of penalties for inaccurate returns.
HMRC have published guidance entitled “Check for signs of labour fraud in construction”. This is aimed both at employers and at individual workers, and provides advice on how to “Find out what checks you should complete and how to report potential fraud”.
The guidance is arranged under the following headings:
- What labour fraud in construction is
- Recognising signs of labour fraud
- If you’re an employer or owner
- If you’re a worker
- How to report potential fraud or tax avoidance
- If you do not report labour fraud
Related content from Claritax Books
Construction Industry Scheme, by Howard Royse, is a practical guide to dealing with the requirements of the Construction Industry Scheme. The book complements and expands upon HMRC’s publication CIS 340.