Employment status within the construction industry
The Inland Revenue has embarked upon an exercise to challenge the self-employed
status of workers within the construction industry with the aim of re-classifying
subcontractors as employees for tax purposes. There are currently many
thousands of workers using the Construction Industry Scheme (CIS) putting
them outside of the PAYE payroll system which is subject to basic and
higher tax rates and NI contributions.
Under new legislation due to apply in April 2006 the onus will be on
the hirer to satisfy itself that a subcontractor is genuinely self-employed.
Underpaid PAYE tax and national insurance when a worker has incorrectly
been paid as self-employed will be due from the hirer, potentially leading
to substantial liability. The status of the subcontractor in the current
or previous two tax years will determine future status, and so it is
important that status is determined sooner rather than later.
It is important to note that the Inland Revenue is not the sole arbiter
of employment status, it is a legal issue and the Inland Revenue's viewpoint
can be contested. Lawspeed specialises in the area of self-employed status
and has successfully advised and represented many contractors, providing
certainty and saving thousands of pounds of tax in the process.
Having the right contract and arrangements in place is key. Lawspeed
provides easy to use contracts offering maximum protection against commercial
and employment status risk.
Service offerings to construction companies include:
Reviews of relevant contracts and working practices to assess potential
risk of exposure to additional tax, NICs, interest and penalties
Representations to the Inland Revenue on behalf of those claiming
self-employed status
A full range of industry-tested commercial trading contracts
Internal rules and contracts and external contractor regulations
Assistance with contractual disputes & negotiations
Contact us on 01273 236236 to speak to us about your own circumstances
or submit an enquiry
form and we will contact you.