A labour supplier has been suspended from the HS2 rail project amid allegations that it had been falsely declaring worker status.
According to an investigation by the i newspaper, an employee raised concerns about Danny Sullivan Group via an anonymous email to HS2’s chief executive Mark Wild.
The company was supplying workers to Balfour Beatty Vinci (BBV), one of HS2’s main contractors.
The employee claimed that during an audit, it was revealed that Danny Sullivan Group had around 70 people working under the Construction Industry Scheme (CIS).
This scheme allows contractors to deduct payments from subcontractors to count towards their tax and national insurance contributions.
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In 2024, HM Revenue & Customs tightened the rules around this after investigations showed that some companies were making incorrect CIS tax deductions from payments made to subcontractors.
This meant that self-employed staff were being wrongly billed as salaried employees and so Danny Sullivan Group charged “inflated” the rates it charged to BBV.
The worker also claimed that the company “submitted PAYE payslips in an attempt to mislead auditors”.
A second whistleblower also shared their concerns with HS2 and the paper, claiming that this was “fraud on a large scale which the public have the right to be informed of”.
Danny Sullivan Group has been suspended from new contracts while the investigation takes place. A second company has also been investigated but its suspension was lifted following a period of remediation, but it remains closely monitored.
A HS2 spokesperson said: “HS2 Ltd treats all whistleblower allegations seriously and we are aware of the claims made in relation to labour suppliers on part of the route,” said a spokesperson for the company.
“An investigation was launched earlier this year into a number of different allegations and our contractor BBV has implemented additional monitoring and controls.”
The Department for Transport said it would ensure any claims of misconduct in the HS2 supply chain would be thoroughly investigated.
The HS2 project was announced in 2009 as a major rail infrastructure project to connect the north and south of England, but has been beset by delays and challenges. The scale of the project has significantly reduced after costs ballooned, and will now terminate at Birmingham.
A Danny Sullivan Group statement to the Guardian said the company took the allegations “extremely seriously”, and that it was cooperating fully with the investigation.
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