Tax authorities brought in
HS2 Ltd has referred one of its subcontractors to HM Revenue and Customs following serious allegations of payroll fraud related to the supply of construction workers.
The claims, initially raised by whistleblowers, suggest that some subcontracted staff were misclassified as salaried employees, with falsified payslips submitted to justify inflated payments.
While HS2 Ltd had already launched an internal investigation, it has now escalated the matter to tax authorities for further scrutiny.
The contractor under investigation supplied labour to Balfour Beatty Vinci (BBV), one of the key delivery partners for the London to Birmingham leg of the project.
Fake documentation and rate inflation
According to reports, self-employed workers were wrongly declared as full-time staff, enabling labour providers to claim higher rates than appropriate.
Falsified payslips were allegedly used to support these claims, raising concerns about the accuracy of payroll practices and possible misallocation of public funds.
One of the subcontractors under review remains suspended from securing new work while inquiries continue. HS2 Ltd has also encouraged any additional information relating to the case to be submitted through confidential reporting systems.
Government oversight and political attention
Transport Secretary Heidi Alexander is expected to address the issue in Parliament, reflecting the seriousness of the allegations. The Department for Transport has made it clear that all claims of fraud, bribery or corruption associated with HS2 will be fully investigated and addressed.
The controversy adds to the growing scrutiny surrounding HS2, a project that has faced mounting criticism due to delays, budget overruns, and the cancellation of key segments. The second phase of the line, which was originally set to reach Manchester and Leeds, has been abandoned.
Continued pressure on HS2
As one of the UK’s most high-profile infrastructure schemes, HS2 remains under significant public and political pressure. Allegations of financial irregularities may further undermine confidence in its delivery and governance.
HS2 Ltd is continuing its internal review alongside the external investigation by HMRC, as the government looks to demonstrate robust oversight of the multi-billion-pound programme.
