The Revenue has indicated that 25% of all audits carried out this year and next will be in the construction sector and that the main taxes it intends to focus on include VAT, PAYE/PRSI and Relevant Contracts Tax (RCT).

"We'll be advising defaulters to own up and set their house in order, " says Ivor Feerick, Partner in BDO Simpson Xavier.

"Under the Revenue code of practice there is an opportunity to come clean and minimise your liability. There can be penalties, but it's significantly in your interest if you're pro-active about settling."

With 300,000 people now employed in the construction industry, it has recently become an area of intense focus and aggressive investigation by the Revenue.

Under RCT legislation, someone identified as a principal - and that would include anyone primarily responsible for constructing buildings - is obliged to deduct 35% of monies paid to any subcontractor they engage.

"And therein lies the problem, " Ivor Feerick says. "A lot of these subcontractors are potentially employees.

"You could be a builder and I might offer to build you a wall. As an employer, your preference is not to have someone as an employee with all that that entails - 10.75% PRSI and entitlements like pensions, etc. I, as a subcontractor, am able to invoice you and I remain in control of my own tax affairs.

"The last time the Revenue examined contractors books they said: ?Listen, him, him and him - they should be employees, put them on the books going forward.'

"Every year, when it comes round to National Pay Agreement talks, the government is under pressure from the trade union movement who say they're losing out on membership because people operating as subcontractors are potential employees, " says Feerick.

"Then you have the black economy with guys doing cash jobs."

According to Feerick, Revenue is now employing more sophisticated techniques to uncover evidence of tax evasion in the industry.

"Computerisation has helped. Their systems are better aligned. And they will, for example, go into a large builders' providers and ask:

?Who's buying from you?' They can then follow the trail down from there."

"RCT is quite penal if you get it wrong, " claims Feerick.

"It's 35% of the VAT-inclusive amount you can be hit with, plus interest, plus penalties, plus publication."

The financial advisory firm intends holding a series of workshops around the country that will deal specifically with the taxation issues faced by the main players in the �?�28bn construction industry, including property developers, construction companies and providers of goods and services to the sector.

The workshops are currently scheduled to take place in Waterford, Cork, Limerick, Galway, Meath and Dublin.

"We'll be organising small groups of no more than around 12, so people have an opportunity to talk individually to us and work out how they're going to approach the Revenue, " Feerick says.

It isn't just the taxpayer who sometimes has difficulty understanding what can be complicated tax legislation, Ivor Feerick believes.

"To be completely honest, even within the Revenue - specifically in relation to Relevant Contracts Tax - the level of knowledge over the last few years has been very minimal.

And Revenue know that. It's a grey area, to some extent."