After a game of Padel we sat down with Dominic Jones from PMJ Risk Solutions and Jack Slogget from Tax Radar to talk about myths costing construction firms money. Some of this will annoy you.
Especially if you’ve been paying for insurance you don’t need.
Myth 1: Umbrella Companies Insure Your Workers
Your umbrella company tells you they insure your workers. You’re paying fees partly because of this. You think you’re covered.
You’re not.
Umbrella companies handle payroll. They don’t control the site. They don’t issue risk assessments. They don’t provide PPE. They don’t manage health and safety.
So how can they insure workers they don’t control? They can’t.
If you’re the principal contractor bringing labour only workers onto your site, you’re responsible for their insurance. Full stop.
The umbrella company justifies their fee by claiming they insure your workers. It’s nonsense.
Myth 2: Genuinely Self-Employed Means Bonafide
Making workers genuinely self-employed doesn’t mean they’re bona fide subcontractors. They’re still labour only.
Labour only workers are covered under your insurance. Bonafide subcontractors need their own separate cover. And their cover needs to match yours.
That’s written into your insurance contract. Check what you’ve agreed. Most people don’t.
Dom asks: do you actually check your subbies have insurance? Most firms say no. So why require it in contracts?
He’s seen gas engineers subbing into main contractors with gas work exclusions in their policies. How? Generalist brokers placing your nan’s cat insurance one day, quoting £40 million construction contracts the next.
They’re not specialists. They don’t understand construction risk.
Myth 3: Your Accountant Handles Tax Compliance
Jack from Tax Radar spent 15 years sorting out HMRC investigations. April 2026 brings new CIS fraud measures that will fundamentally change how you operate.
If you have gross payment status and someone in your supply chain commits fraud, HMRC can come after you. Not because it was you who committed the fraud. But because you “should have known” about it.
If HMRC successfully argues you should have known, three things happen:
They cancel your GPS for five years. They make you pay the tax. They charge you a 30% penalty.
Five years without GPS means five years of 20% deductions on every invoice. For businesses relying on GPS for cashflow, that’s catastrophic.
What “Should Have Known” Means
In a nutshell: supply chain due diligence. Checking who you’re working with. Verifying GPS status. Looking at whether subbies have dodgy histories.
Jack’s building tools that track your supply chain. Check GPS status automatically. Flag risks before they become problems.
HMRC is targeting £200 million from construction over the next five years. Not just CIS. Any tax.
Make mistakes in returns over three or four years, it builds up. Suddenly huge liability.
Jack sees it constantly. Contractors who didn’t know how to set up CIS correctly. Who just relied on their accountant. A generalist who didn’t realise the subcontractor needed CIS registration. Now they pay it all back.
No excuses. Your responsibility.
The Specialist Problem
When HMRC comes knocking, they’re asking you. Not your accountant. You need specialists who understand construction.
Jack’s old work defending HMRC investigations cost £750 an hour. Prevention is cheaper.
Get specialists involved before problems arise. Dom handles insurance. Jack handles tax compliance. We handle employment status and contracts.
What You Need to Know
On insurance: Umbrella companies don’t insure your workers. That’s your responsibility. Labour only subbies are covered under your insurance. Bonafide subbies need their own cover that matches yours.
On tax: April 2026 brings CIS fraud measures with serious teeth. Supply chain due diligence isn’t optional. If HMRC can argue you should have known about fraud in your supply chain, you’re liable.
On advice: Use specialists. Insurance specialists for insurance. Tax specialists for tax. Employment status specialists for contracts.
Generalists cost more when things go wrong.
Want to discuss your setup? – Get the right advice from the right people before HMRC starts asking questions.