Further growth in false self-employment revealed

Figures obtained by construction union UCATT via a Freedom of Information request reveal that the problem of false self-employment is continuing to increase in the construction industry.

The figure acquired from the HMRC reveals that in 2015/16 a total of 992,973 people or organisations received a net payment from the Construction Industry Scheme (CIS). This was a 3 per cent increase on 2014/15 when 963,000 people received at least one CIS payment. In the last two financial years people receiving CIS payments have increased by 7 per cent.

Due to the unique way that CIS operates (see notes to editors) the vast majority of people receiving CIS payments are not genuinely self-employed but are falsely self-employed.

The continued increase in false self-employment is particularly alarming as the Government took action to prevent construction false self-employment via engagers (agencies and payroll companies) in 2014, which was aimed at reducing false self-employment.

These measures created the umbrella company problem, which while it is an exploitative form of employment, as workers have to pay both employer’s and employee’s national insurance, is not false self-employment.

One of the major problems with CIS is the lack of enforcement activity. In 2013/14 just 24 companies were fined for wrongly recording the employment status of their workforce.

In 2012 research undertaken by UCATT revealed that false self-employment was costing the UK Exchequer £1.9 billion per annum. The increase in the use of CIS means that this figure is expected to have increased substantially.

Brian Rye, Acting General Secretary of UCATT, said: “These figures lay bare the sorry mish mash of the UK construction industry. It is no wonder that productivity is low, accidents are high and we fail to train apprentices when the industry is fundamentally built on sand. By failing to employ workers directly the construction industry is demonstrating a short term mindset where workers are casually tossed aside at the completion of every project.”

Mr Rye, added: “There needs to be a fundamental reform of the industry to ensure that workers are either employees paid by standard PAYE methods or are genuinely self-employed. Until this is resolved the inherent contradictions in the industry will continue.”

 

 

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