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Tax scrutiny for Games firms

Olympic contractors have begun asking accountants to check their suppliers’ tax affairs to make sure they don’t fall foul of tax inspectors.

The Revenue has set up a 2012 co-ordinating team which involves drawing up working groups to scrutinise compliance, customer focus and security and customs procedures.

It is being chaired by HMRC director Doug Tweddle, who spearheaded the introduction of the new CIS tax scheme.

The run-up to the Games will be a priority for tax officials and an HMRC spokesman said: “It is a director-level strategic group which has been set up to agree and manage any conflicting delivery priorities for the Games.”

Now, as some of the big contracts begin to be awarded, main contractors have begun to contact tax specialists to make sure their building teams are falling into line on compliance and bogus self-employment issues.

Alan Nolan, a director with KPMG, said: “We’re getting big firms asking us to develop a checklist that can be identified as areas of risk by main contractors.

“With the Olympics, there is a huge pressure to deliver and main contractors are very much reliant on their subcontractors. They want to make sure their suppliers’ houses are in order if there are any raids by the Revenue or if the site is raided by immigration.”

The Revenue has begun telling contractors to make sure that subcontractors they use have passed its employment status indicator and that monthly tax returns are filed on time.

It is also planning to increase pressure on firms to make sure self-employed workers are properly classified. Mr Nolan added: “The Olympics will be easy to pick off for the Revenue and that’s why firms are having to be very careful.”

The Revenue spokesman said it would be focusing in particular on the employment status of individuals: “Incorrect classification of workers in the construction industry remains a major risk and HMRC deploys its compliance resources accordingly.”

He said HMRC was also working with the Border and Immigration Agency to make 2012 contractors aware of their legal obligations when taking on overseas workers.