This is the warning from the ACCA who said contractors and sub-contractors working in construction could face massive tax bills going back six years.
The ACCA’s warning comes as the Revenue sent out 57,000 letters to contractors and sub-contractors working in construction suggesting they may have misclassified their employment status.
Contractors are warned in the letters to ‘get their house in order’.
In essence, the Revenue is saying they should not in fact be registered as self-employed, when they are in actually employees.
Chas Roy-Chowdhury, ACCA’s head of taxation warned: ‘There is a clear threat of penalties and the reimbursement of PAYE tax and Class 1 NIC, plus interest, for the employment of any sub-contractor who the Revenue deems should have been taken on as an employee.
‘Contractors currently have to be able to produce accounts for the past six years. We are concerned that if the Revenue decides to carry out audits that far back, contractors could face massive tax bills.
‘Furthermore, if contractors are forced to take on sub-contractors as employees they also face additional annual costs such as staff holiday entitlement, sick pay and employers national insurance contributions.’
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