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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: liaison: specialist teams - labour provider units (LPU)

Labour Provider Units (LPU) are part of Fraud Investigation Service (FIS), covering the UK. They tackle failure to register for VAT, National Insurance contributions and income tax, having developed specific techniques to counter inaccuracies peculiar to the nature of risk.

Labour Provider Units are integrated multi skilled teams that carry out a wide variety of compliance checks. Labour Providers, also known as Gang Masters, operate across a wide variety of sectors prevalent within agriculture and construction, also in sectors that include for example, contract cleaning, food processing packaging, transportation, parcel delivery, security. Essentially wherever there is a need for a transitional or seasonal workforce. In the main this is likely to be unskilled or semi-skilled labour but not exclusively - labour provision is known to operate within the medical industry with both nurses and consultants presenting similar risks and also within the full range of services provided by local authorities.

The main compliance problems in the sector are bogus supply chains and serial phoenixism. The principal revenue risks relate to:

  • failures by labour providers in respect of their own liabilities - either as a sole trader, partnership or company
  • failures by labour providers in respect of their workers.

Where Employer Compliance come across labour providers during the course of their work such cases should be referred to the Labour Provider Risk Team in Coventry.

EU Large Employers

The unit will continue to undertake compliance activity on all relevant employers but should follow the process below for all EU Large Employers/Contractors.

  • CRM cases

    • Only with the approval and direction of the CRM.
  • Non CRM cases

    • Only with the agreement and direction of

    • an EC Tax Specialist in L&C or
    • Individual Customer Group.

Where clearance is sought in respect of a business that has not had any previous EC activity then a full assurance visit will be appropriate. In this respect the Specialist Team will work the case jointly with the L&C team.

Where such cases are worked in different locations, using different OUIDs then both offices will

  • register the case on Caseflow and
  • agree a Compliance Revenue share on conclusion of the case.

In this respect it is essential that there is liaison between caseworkers at all key stages.

Where the Specialist Team is in the same location/OUID as the L&C team then only one entry will be made on Caseflow with the total Compliance Revenue entered on conclusion of the intervention.

For current working cases the EC caseworker should liaise with the CRM or EC Team Manager to appraise them of the position.