JOB agencies who supply workers for the construction industry are being warned that they could be hit by huge tax bills.

Mr Derek Hall, Tax Partner at financial advisers Grant Thornton, said: "The National Insurance (NIC) laws say that agencies who supply workers to the construction industry, must also pay their NI contributions.

"However, until now the taxman has not always chased this payment."

But he believes this situation is about to change.

"This is because of the new approach to the tax treatment of building workers, which comes into force on April 6," he said.

"I know that many agencies have already planned for the changes and plan to pay the NIC for building workers - however, there are others who still believe that NIC can be avoided if you obtain work through an agency.

"I do not believe that this is possible and I fully expect those agencies which pursue that line to find the taxman knocking on the door."

He warned that those agencies which did not pay NICs should take advice about doing so immediately or face the consequences in the shape of a large tax bill.

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