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Are You Ready for the HMRC Crackdown?

11 Jan 2017

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RIFT have written a White Paper in partnership with Construction News to analyse the employment status challenge situation.

The likelihood of construction firms of all sizes receiving a status enquiry has risen significantly as HMRC and the government look to recoup  up to £1.5bn a year that they believe is “missing revenue” lost through “false self-employment” in the construction industry.  Over 1000 new case workers have been recruited by HMRC as part of a new Employment Status and Intermediaries Team to help them do just that and they’re promising “high-quality and hard-hitting results”.

With the change in legislation having taken so long to bite, some dangerous myths have arisen and this is coupled with a false sense of security about the impact of employment status challenges, particularly within construction.

Another danger is that most existing case law is decades old and no longer has much relevance to the current construction industry. Test cases under the new rules could be months or years away, and judgements could have serious ramifications across the industry.

One of the biggest risks is that an unprepared contractor goes up against the tax authority with a poorly prepared argument and loses. This could create case law that makes it much easier for HMRC to use agency legislation to claim national insurance payments from other contractors.

Ignoring the situation is no longer an option. Neither is believing in many of the myths that have arisen around this subject in the past few years. You need to act now to protect your business.

The full White Paper can be read here.

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