Contractor Groups Respond To UCATT Call

Following UCATT’s call for HMRC to investigate the actions of some payroll companies and contractors in the construction sector, a number of industry groups have responded.

Kevin Green, from the REC, said that they are working with the government to address this issue. However, he pointed out that the UK economy should support self employment and new businesses, something which the Prime Minister announced himself last week. He continues saying;

“If we want to retain a dynamic construction industry in the UK we need to retain its use of a skilled and flexible workforce. Payroll companies help the self employed particularly with the administration of pay. Together with the review of IR35, we urge the Government to look into this whole area as part of their commitment to help small businesses and entrepreneurs.”

Simon Noakes, of the REC’s construction group, spoke further about this issue. He said they support the work that recruitment agencies do, particularly with construction workers.

“It is important to note that the vast majority of self-employed workers in construction choose to work in this way. The idea that contractors are somehow coerced into bogus self employment is wide of the mark. It is also important to recognise that construction businesses need a flexible workforce, especially as the market remains volatile with profits on projects being reduced.”

“Companies need to know that competent, self employed professionals are out there to meet short term increases in demand, while at the same time controlling fixed costs. The added value provided by specialist recruitment agencies gives construction companies at all sizes the confidence to tender for large scale projects.”

However, Stuart Davis of the Freelancer and Contractor Services Association (FCSA), supports the calls for an investigation. He claimed that;

“Fraudulent employment practices deny employees their rights and take money from the Treasury. It is therefore right that government investigates this matter rigorously.”

“But it is vital to distinguish between the highly-skilled, professional contractor who chooses to work flexibly, and the oppressed worker forced to change his employment status to keep his job. The UK’s legitimate flexible workforce contributes £21bn to the economy and continues to provide crucial flexibility for the economy across a wide range of sectors as it recovers from recession.”

The REC have also verified that under current regulations, self-employed workers must be registered with both HMRC and the Construction Industry Scheme (CIS) before any payment is processed. Construction companies work closely with HMRC to verify the status of every sub-contractor paid within the CIS.

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, including our own CIS service. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.