£880m payroll giant in the black despite HMRC settlement
PAYROLL giant Hudson Contract Services maintained profits and increased turnover to £884m last year after a battle with an industry training board and a settlement bill from HMRC over director incentives.
Bridlington-based Hudson specialises in payroll and compliance services for the construction industry.
The company, which also has offices in Manchester, returned revenues of £884m in the year to April 5, 2016, up 6% on the year before after benefitting from the upturn in the construction sector.
It said it had attempted to combat the effects of recession on its bottom line with a marketing campaign, and has maintained pre-tax profit levels despite an expensive battle with HMRC, achieving £9.19m in profits for the year, only slightly down from the £9.93m it made the year before.
This includes a deduction of just over £400,000 for a voluntary HMRC settlement relating to a director’s incentive scheme between 2010 and 2013, and £1.62m in corporation tax as part of the settlement.
Predicting future legislative and potentially competitor action, Hudson said it would ensure it was in a strong position in the coming years to enable it to combat the challenge. It said it had already undertaken an extensive review following legislation changes by HMRC that sought to crack down on false self employment registrations.
It is also looking outside its customer base to a wider cross section of customers to minimise the risks associated with being in the construction sector.
Last year an attempt by Hudson to challenge the Construction Industry Training Board (CITB) levy, which is said “short-changed” SMEs, failed. The judge ruled in favour of BIS and CITB and dismissed all of the claims by Hudson. It was also ordered to pay CITB’s legal costs.
It has also been challenged previously by HMRC in the High Court in 2007 and won. But in 2012 Hudson was the subject of an undercover investigation by construction workers union UCATT, in which it said that Hudson was getting full time employees to register as self employed subcontractors to enable construction companies to save millions of pounds in tax, whilst also depriving genuine employees of rights.
