More than 400 customer service staff on strike at tax body 

Subcontractors say strike action by HMRC staff could see them forced to pay higher than necessary tax deductions. 

The first of three weeks of industrial action ended last week in Glasgow and Newcastle-upon-Tyne, with the PCS union demanding a 10% pay rise and assurances on pensions, job security and cuts to civil service redundancy pay. 

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Roughly 84% of HMRC workers supported strike action in the PCS’ February ballot

According to payroll firm Hudson Contract, construction firms are reporting long delays and even being cut off from the tax agency’s helpline for the Construction Industry Scheme (CIS). 

Under the CIS, contractors deduct money from a subcontractor’s payments and pass it to HMRC, where it is counted as advance payment towards the latter firm’s tax and national insurance. 

Online verification of subcontractors under CIS has not been affected, according to Hudson Contract, but new registrations and those seeking advice from HMRC are reporting “serious issues”. 

HMRC has redeployed staff to limit disruption, but according to the union, the strike action has meant just 63% of calls are being answered in the CIS. 

Ian Anfield, managing director of Hudson Contract, said: “The CIS verification process, and the queries that often come from it, are incredibly important for small firms and individuals because it is the process by which at-source CIS deduction rates are decided.  

“Sometimes those with gross [zero deduction] will come back at 20%, and those with 20% deduction will come back at 30% when verified electronically. Only HMRC officers can sort these issues out. 

“The upshot, if HMRC are not adequately manning the phones, is that some subbies will suffer higher than necessary CIS deductions, and given the tax year has just begun, they will have a long wait to get that money back next April – not great whilst small firms are fighting inflationary pressures, and during a cost of living crisis for sole-traders.” 

Roughly 400 HMRC workers are involved in the action, which came on the back of a February ballot that saw a total 33,000 civil servants join the national dispute. 

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