UCATT cautiously welcomes Government plans to clamp down on false self-employment

Between December 2013 and February 2014, HM Revenue and Customs consulted on proposals to bring in tighter measures that aim to reduce the levels of false self-employment. False self-employment has been endemic in construction for many years but has recently become much more wide-spread in other industrial sectors.

If the plans are approved by Parliament, then a worker would automatically have to be paid via PAYE if he or she was under the direction, supervision or control of an intermediary. In the original consultation document, the Treasury made clear that if a worker is engaged by an intermediary, “there will be a presumption that there is control over the worker” and they will be treated as an employee for tax and national insurance purposes”. “In the majority of cases the worker will gain the benefits of being an employee for employment rights purposes”.

“I am pleased that the Government has finally listened to our representations and has accepted the fact that something needs to be done about the rampant levels of false self-employment in construction. Workers have been deprived of proper protection for years when they were forced to work as falsely self-employed”, said Steve Murphy, UCATT General Secretary.

“I welcome that the Government has not backed down on widespread demands to delay or abandon the plans. When working under condition of direct employment, workers will soon be able to also enjoy the benefits of direct employment including sick pay, redundancy pay, holiday pay and pension provisions”, Mr Murphy added.    

In its consultation submission UCATT argued that as well as the measures being taken against intermediaries the Government should reintroduce the deeming proposals that were proposed by the previous Labour Government. Under deeming it was proposed that workers would be considered employees for tax purposes unless they supplied their own equipment or materials or supplied labour. UCATT also call for the abolition of the Construction Industry Scheme (the stand alone tax scheme for the construction industry where the self-employed are taxed at source) and for the development of clear employment rules where workers are genuinely self-employed or employees.

The majority of measures, subject to parliamentary approval, are scheduled to be introduced in April 2014, partly through the Finance Bill. Some specific requirements on record keeping, returns and penalties would come into force in 6th April 2015.

HMRC has drafted extensive guidance explaining when a worker would be seen to be working under the supervision, direction or control of an intermediary.

For further information please contact Jim Kennedy on 0789 441 4606.

Go to top