Olympics site contractors reminded of tax rules

Companies working on construction projects for next summer's Olympic Games are warned that HM Revenue & Customs (HMRC) will crack down on tax, National Insurance or national minimum wage breaches.

Mike Eland, HMRC's Director General of Enforcement and Compliance, said: "We aim to help contractors and employers understand their responsibilities and comply with their obligations but we will also catch and deal with those who deliberately break the law. This is only fair to those businesses who do play by the rules and want to compete on a level playing field.

"The Olympic and Paralympic Games represent a great opportunity for UK companies - but they must at the same time meet their tax and employment obligations.

"Only those who choose to break the rules, or deliberately evade the tax they should be paying, will be targeted. Honest businesses have absolutely nothing to worry about.

"But the message is clear - if you deliberately seek to evade tax, HMRC can and will track you down and you'll face not only a heavy fine but possibly a criminal prosecution as well."

HMRC will target contractors and employers who:

do not correctly classify the employment status of their workers;
do not deduct and account monthly for PAYE and National Insurance;
do not deduct and account monthly for deductions under the Construction Industry Scheme(CIS) ;
avoid paying the national minimum wage; and
fail to meet their obligations to file statutory CIS or PAYE returns.

If they are late paying PAYE or CIS deductions, interest and penalties can be charged. Late or non-filing of monthly CIS returns by contractors can also lead to penalties. And breaches of NMW legislation can result in an unlimited fine and criminal record.

In addition, falsely classing workers as "self-employed" to avoid tax, National Insurance or NMW can result in severe financial penalties.