Inland Revenue officials have admitted that they visited Sir Robert McAlpine, Laing and a builder with a turnover of 拢1m-1.5m, which they refused to name, last week. They were investigating claims that the Construction Industry Scheme was too expensive to administer.
The visits were prompted by complaints from the Construction Confederation and the Federation of Master Builders. Liz Bridge, the confederation's tax expert, said the biggest problems were with the CIS6 registration card and the CIS24 vouchers that support it.
Bridge said main contractors were complaining that these vouchers took twice as long to process as the others because subcontractors were failing to fill out the CIS24 forms correctly. Bridge wants both the registration cards and the vouchers to be abandoned.
Laing group finance director Les Angell hosted the Inland Revenue visit. He said: "We told the inspectors that we have too many people spending too much time on this." He added that people who handled the accounts were working long hours to try to cope with the vouchers.
One contractor said it had taken on extra full-time staff to cope with the paperwork generated by the scheme.
Angell also complained that the Revenue was treating the claims with suspicion. "We're trying to run a business. We are not crooks," he said.
The Revenue has asked Laing and the Construction Confederation to find out how much the scheme is costing to implement. Angell said he hoped to have the analysis ready next week.
More information will be supplied by the Construction Confederation, which is sending a questionnaire to members this week to ask them how much the CIS6/CIS24 scheme is costing. Bridge estimated that the price-tag will run into millions.
"Every time a voucher is sent in the post it costs 50p and some contractors are rejecting every certificate that comes through the door because they are not filled in correctly," she said.
The Inland Revenue said the scheme was not in trouble. "Just because we're reviewing at an early stage doesn't mean anything," a representative said. "Ministers have asked us to keep a close eye on the scheme and we want to make sure that it runs smoothly. There's no guarantee of change."
The Revenue said it had further visits to contractors planned for next week, including another to a smaller contractor.
The scheme, which came into full effect on 5 November, was due to start in August but contractors successfully lobbied for a three-month moratorium and have continued to use the 714 tax system until now.
