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False Self Employment in the Construction Industry Update
No CommentsAt last the results of the consultation exercise, False Self Employment in the Construction Industry have been published and we seem to be back to an old style consultation – we ask for your views then when we don’t like the answers we’ll try and ignore them. However, HMRC appear to have left almost all parties unhappy with their initial proposals. Summarised below are details from the consultation:
- Nothing is going to happen yet and nothing will happen until the industry picks itself up, certainly not before the Olympics in 2012. So be prepared for employer compliance reviews, tax investigations and employment status reviews to continue
- The simplistic approach of the government having three tests has been widely criticised and they have conceded that further consultation will be required
- There is also a lot of criticism that any simplistic approach away from case law is only being geared at the Construction Industry, what about other industry sectors?
- The government have indicated that they will look into organisations purporting to get round the rules such as umbrella companies, managed service companies and labour style agencies, which is no bad thing as they are so blatantly flouting the rules and taunting HMRC (never a good idea for them or more importantly their clients)
- Interestingly, the Trade Unions aren’t happy as they could potentially see a lot of new members but the government proposals actually mean that although subcontractors would suffer PAYE/NIC they would not be regarded as “employees” but “deemed employees” which means that they would have no employment rights or benefits. This has been widely criticised because it would actually create “false employment” and the employment law side of this has not really been addressed
- There is a General Election due, probably around 6th May, which could mean a different party in power. The Conservatives have not indicated that they will pursue what is effectively a witch hunt in the Construction Industry
So we’re back to watch this space but be aware that HMRC are out there looking at your self employed arrangements
Published on March 16, 2010 · Filed under: Construction Industry, Employer Tax Compliance, HMRC – what are they up to?, Tax Investigations; Tagged as: avoidance schemes, construction industry, employer compliance review, employment status, employment status indicator tool, employment status reviews, false self employment in the construction industry, hmrc enquiry, PAYE investigation, self employed, Self employment, Tax avoidance schemes, tax investigation