CISR85090 - CIS fraud measures: Due diligence and risk assessments: HMRC guidance on due diligence
Due diligence checks will need to be more extensive in business sectors that are commercially risky or vulnerable to fraud, such as the construction industry. HMRC does not expect a business to go beyond what is reasonable but would expect the business to make a judgement on the integrity of supply chains they operate with.
HMRC does not prescribe a list of checks that must be carried out. HMRC’s due diligence guidance highlights that a person should carry out appropriate and proportionate due diligence and risk assessment checks to address the risks to the business of the particular transactions that are being contemplated.
It is important to bear in mind that one of the aims of due diligence and risk assessment is to enable the person to make a judgement on the integrity of their supply chain and the subcontractors, contractors, customers and workers within it. Therefore, checks undertaken purely in relation to the person’s immediate contractor, subcontractor and customers will not necessarily be sufficient to achieve this.
Help with labour supply chain assurance — GfC12 https://www.gov.uk/guidance/help-with-labour-supply-chain-assurance-gfc12 aims to help businesses strengthen their assurance practices and identify, mitigate and reduce labour supply chain risks.