Southall based Konstruct Recruitment Limited, which went into liquidation in July 2023 nine months after the tribunal hearing, had a sole director Rajanbir Singh, who provided general labour supplies to construction companies and was first registered for VAT in July 2013.

The company and the taxpayer were both found liable for tax penalties for a total of £160,000 as the tribunal was ‘satisfied that Konstruct had knowledge not only of tax fraud in the construction labour supply market but of specific tax losses in its own supply chains’.

In December 2019, HMRC rejected Konstruct’s claim for an input VAT reclaim of £264,124.40 incurred on the purchase of labour supplies from two companies, Combat Construction Limited and Sandhar Consultancy Limited, and also issued a penalty for £79,237.20 under section 69C of the Value Added Tax Act 1994 (VATA). A further three suppliers he dealt with on a regular basis were also flagged for tax fraud over the same two-year period.

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