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HMRC internal manual

Labour Provider Guidance

Interventions: fraud and construction: Measures and yield

Methods of preventing tax loss and generating additional yield

  1. VAT Assessments - these are issued against the main contractors and the buffers for denial of input tax.
  2. Reg. 13 Determinations - issued against the contractor for failure to make deductions from Subcontractors.
  3. Reg. 80 Determinations (PAYE) and Section 8 Decisions (NIC) - would be raised against the contractor/ Employer, to recover both PAYE and Class 1 NICs on payments to workers who have been re-categorised as employees.
  4. Debt Due to the Crown - issued where unauthorised VAT invoices have been issued.
  5. Future Revenue Benefit - This can be claimed where we can illustrate that we have brought about a change in the behaviour, which results in additional tax yield to HMRC, and normally occurs as a result of end user work.
    • Revenue Loss Prevention - Direct tax: We can claim this when we have successfully removed Gross Payment Status (GPS) from a non-compliant subcontractor. The calculation should be based on the traders record of payments received up to the date GPS was withdrawn. Unless there is evidence that the business would have ceased earlier, for example where it was known that all contracts would have been completed at an earlier date, RLP should be calculated for 2 years (see LPOG10400).
  6. Revenue Loss Prevention - Refusal of a VAT registration to prevent tax loss (see LPOG10400).
  7. Revenue Loss Prevention - Compulsory VAT deregistration to prevent further tax loss (see LPOG10400).