Construction Workers Face HMRC Investigation

Contractors in the construction industry face an investigation from HMRC over the legitimacy of their self employed status. The Union of Construction, Allied Trades and Technician (UCATT), has raised the claim to HMRC that some payroll companies are avoiding National Insurance payments by registering workers as self employed.

UCATT has written to HMRC as well as the Exchequer Secretary David Gauke, demanding that they investigate this concern about payroll companies in the construction sector; the union’s general secretary Alan Ritchie has said;

“There has been a huge growth in payroll companies. These companies do not perform construction work, nor do they hire labour to companies, their sole reason for existence is to enable companies to deny workers basic employment rights whilst avoiding paying national insurance contributions. The Government and the Revenue need to intervene to end these practices once and for all.”

The construction industry had shown some good signs of growth at the end of last year, with spending on government projects expected to boost demand for workers. This issue regarding payroll companies was recently discovered after an investigation by newspaper ‘The Daily Mirror’.

The problem with registering workers as self employed when they are actually employees is that they do not receive the same rights as permanent staff, such as holiday and sickness pay, as well as dismissal rights. The payroll companies also avoid paying a large amount in National Insurance contributions, as highlighted by Mr Ritchie.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.