HMRC targets construction sector as £15bn raised in compliance crackdown

HMRC has generated over £15 billion in just six months through compliance activity, with the construction sector becoming a major focus.

HMRC are increasingly scrutinising how contractors classify subcontractors, particularly under the Construction Industry Scheme (CIS). Many contractors are being challenged on whether individuals treated as self-employed should actually be classed as employees for tax and National Insurance (NI) purposes.

Even contractors that believed they were compliant are facing significant financial exposure, often due to poorly written contracts that fail to accurately reflect working arrangements. In some cases, HMRC has reclassified subcontractors as employees, resulting in substantial backdated liabilities and penalties for up to 6 years.

In addition to employment status issues, firms are being caught out by technical breaches of CIS rules—such as errors in handling payments for materials and plant. Although subcontractors may provide the figures, responsibility ultimately sits with the contractor.

With increased investment in technology and thousands of additional compliance staff, HMRC is now identifying even minor errors more quickly and taking a stricter approach to enforcement. This marks a shift from previous practices, where penalties were sometimes avoided if mistakes were corrected promptly.

If you are concerned about your CIS compliance, please contact us 0330 052 5200 or email sales@mineralpayroll.com for a free compliance health check and further information.