How does HMRC pick who to investigate?
Each year the Revenue target specific industries for investigation; construction is always on this list. Now using historic online CIS returns they are able to data mine submissions in real-time looking for hallmarks of employment. These include:
- Sub-contractors with only one employer
- Sub-contractors who are paid regular amounts
- Sub-contractors receiving few payments for materials
- Sub-contractors who pay no other sub-contractors
Any contractor engaging these types of sub-contractor is flagged as a potential target.