Warning to contractors as HMRC targets payroll fraud
Summary
HMRC has launched a targeted crackdown on payroll fraud in the construction sector, focusing on criminal umbrella companies and labour supply chains in Liverpool and Manchester. Legal commentators say contractors should strengthen due diligence because HMRC may pursue unpaid tax further up the chain where red flags should have been identified.
Why it matters
Residential property surveyors involved in contractor oversight, refurbishment, or development projects may need to understand the compliance risks associated with labour supply chains. The article highlights potential tax, reputational and enforcement exposure where subcontracted labour is used on construction-related work.
Key points
- HMRC is running a four-week pilot campaign against payslip fraud and illegal payroll activity.
- The focus is on umbrella companies and labour supply chains that deduct tax and CIS amounts but fail to pass them to HMRC.
- HMRC says contractors may be liable if they should have spotted red flags in their supply chains.
- Workers are being urged to check payslips against personal tax accounts and report irregularities.
- Construction is identified as a high-risk sector, with Liverpool and Manchester highlighted in the campaign.
This is an RPSA summary of a publicly available article. The full content remains with the original publisher.
