23.03.17 Consultation on fraud within the construction sector

Government has officially opened a consultation, following an announcement at Spring Budget 2017, that discusses organised fraud within labour provision in the construction sector and sets out a range of proposed measures to tackle supply chain VAT fraud. Included within the measures are a VAT domestic reverse charge and reforms to the qualifying criteria for gross payment status (‘GPS’) within the Construction Industry Scheme (‘CIS’).

The consultation identifies the methods in which VAT fraud and abuse of GPS for CIS are commonly taking place and how it is missed by officials, such as HMRC, in the first instance. Also, highlighted in the consultation is the amount of revenue lost due to either lack of or no, income tax, VAT and subsequently appropriate NICs being paid by the those involved in fraudulent supply chains.

The consultation opened on the 20 March 2017 and is receiving comments until the 9 June 2017. Government are seeking views on their suggested options for combatting VAT fraud and abuse of GPS as well as other options that could be considered.

Read the full consultation here.