The HS2 labour provider ‘falsely declared’ PAYE in order to inflate the rates

A labour provider has been suspended from HS2 rail due to allegations that they had falsely declared worker status.

According to a report by the i Newspaper, an employee sent an anonymous email to HS2 chief executive Mark Wild about concerns he had regarding Danny Sullivan Group.

The company supplied workers to Balfour Beatty Vinci, one of HS2’s main contractors.

The employee said that an audit revealed that Danny Sullivan Group employed around 70 people under the Construction Industry Scheme.

The scheme allows contractors the option to deduct payment from subcontractors towards their tax and social insurance contributions.

HM Revenue & Customs will tighten the rules in 2024 after an investigation revealed that some companies were incorrectly deducting CIS taxes from payments made by subcontractors.

Danny Sullivan Group billed BBV “inflated” rates because it was billing self-employed employees as salaried staff.

The employee also claimed that “the company submitted PAYE pay slips in an effort to mislead audits”.

Another whistleblower shared his concerns with the paper and HS2, claiming it was “fraud of a huge scale that the public has a right to know about”.

Danny Sullivan Group is suspended from accepting new contracts until the investigation has concluded. The investigation of a second company was also conducted, but the suspension lifted after a period to correct any issues. However, it is still being closely monitored.

A spokesperson for HS2 said: “HS2 Ltd takes all whistleblower claims seriously, and we’re aware of the allegations made in relation labour suppliers on a part of the route,” stated a spokesperson.

“An investigation into various allegations was conducted earlier this year, and our contractor BBV implemented additional monitoring and control.”

The Department for Transport has said that it will thoroughly investigate any allegations of misconduct within the HS2 Supply Chain.

The HS2 rail project, announced in 2009 to link the north and south parts of England by means of a major infrastructure project, has faced delays and other challenges. After costs ballooned the scale of the HS2 project was significantly reduced. It will now end at Birmingham.

Danny Sullivan Group told the Guardian that the company was taking the allegations “extremely serious” and would be fully cooperating with the investigation.