Extra payments from builders, plumbers and electricians after queries by HM Revenue and Customs saw the take rise to £79m in the 2011/12 financial year, up from £67m the year before.
The yield from tax compliance investigations into the construction sector last year was the highest in the last five years, according to a Freedom of Information request to HMRC from construction tax specialist NoPalaver Group.
It signals that there is unlikely to be any let up in recent HMRC campaigns, which have singled out plumbers and electricians warning of heavy fines for failing to declare all tax due.
But NoPalaver director, Graham Jenner, argued revenues gained are relatively small compared to what could be brought in elsewhere.
He said: “HMRC likes to target the construction sector because a little bit of extra effort on compliance work often turns up extra tax revenue from contractors and sub-contractors.
“However, the compliance yield from the construction sector is very small compared to the yield from HMRC’s overall compliance investigations. This begs the question as to why HMRC is spending time pursuing small contractors and sub-contractors, when it could be focusing its limited budget on the tax affairs of much bigger businesses.”
HMRC tax probe yields
- 2006-07: £56.0m
- 2007-08: £57.2m
- 2008-09: £65.6m
- 2009-10: £68.9m
- 2010-11: £66.9m
- 2011-12: £78.9m