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Tackling false self-employment in construction 'will cost supply chain'
21/07/09
Government plans for new legislation to tackle instances of false self-employment in the construction sector will result in increased costs for the supply chain, an industry body has warned. False self-employment occurs when builders, electricians and other tradesmen are given self-employed status for tax purposes, despite having an "employment relationship" in their day-to-day work arrangements.
The Treasury has said false self-employment makes it harder for compliant builders to compete, while also affecting some workers' entitlement to benefits.
Under its proposals, if a tradesman is paid to do work by a person whose main business is carrying out or commissioning construction operations, that payment will be deemed employment income and subject to PAYE and National Insurance.
"Any change in status comes at a cost to the supply chain and it is vital that this is properly understood," said Jason Campbell, chair of the REC's Construction Group.
Builders paid to carry out work for private householders on a domestic property will not be subject to the employment income criteria.
The Treasury's consultation on false self-employment in construction will close on October 12th.
