Construction industry fraud
HMRC have issued a press release following the recent arrest of 21 people by HMRC officers investigating a £6 million pound fraud. The arrests were carried out at locations across the country including the West Midlands, Staffordshire, London and Manchester.
The fraud involved a network of businesses who claimed to subcontract construction industry workers. In reality the businesses were collecting tax and national insurance contributions on behalf of subcontracted workers but never paying the monies collected to HMRC. These businesses are thought to be run by organised criminal gangs who fabricate their tax records for direct and indirect tax purposes before absconding with the money.
The arrests were made on suspicion of conspiracy to cheat the public revenue and money laundering offences under the Proceeds of Crime Act 2002. The Act was specifically designed to take the profit out of crime, making it harder for money to be laundered and depriving criminals of their illicit wealth.
This fraud is likely to affect large numbers of construction industry workers whose tax and national insurance contributions may never have been paid over to HMRC.