Building contractors in the region are being warned they are facing heavy fines if they break new rules on the collection of income tax from workers.

Chartered accountants are urging employers to prepare for a revised Construction Industry Scheme (CIS), which carries penalties of £3,000 for those who break the rules.

Under the scheme, which comes into force next April, construction companies will have to satisfy themselves that their sub-contractors are genuinely self-employed and entitled to receive pay without tax being deducted.

Keith Proudfoot, the Institute of Chartered Accountants' regional manager, said the changes meant HM Revenue and Customs was moving all responsibility for deciding the tax status of sub-contractors on to employers.

"Construction firms need to look carefully at the position regarding all their sub-contractors and make a critical assessment as to whether they are self-employed or are really employees and should have tax deducted from their wages," said Mr Proudfoot.

"Some firms employ dozens of sub-contractors every week and, for many, particularly smaller ones, it is a minefield which will mean a great deal of extra work to make sure they don't make any mistakes."

With the phasing out of CIS certificates currently issued to self-employed sub-contractors, there will no longer be a quick and reliable way for employers to gauge the tax status of the people they hire.

Employers will have to make monthly tax returns and errors could result in a penalty of £3,000.

If returns are not filed on time, there is a further penalty of £300, with an additional £60 for each day the return is delayed.