|
Employment status within the construction industry
The 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 and its compliance visits are set to accelerate during the next year. 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.
The new Construction Industry Scheme (CIS) Regulations have been published as The Income Tax (Construction Industry Scheme) Regulations 2005, SI 2005 No 2045. Under these new Regulations due to apply in April 2007 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 Revenue is not the sole arbiter of employment status, rather this is a legal issue and the 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:
-
Status Reviews
Reviews of relevant contracts and working practices to assess potential risk of exposure to additional tax, NICs, interest and penalties
-
Employment Status Audit
On-site audit of working arrangements with subcontractors, resulting in a detailed report on our findings and specific recommendations to reduce the risk of subcontractors being considered employees for the purposes of tax deductions or employment rights
-
HM Revenue & Customs Representation
Representations to the Revenue on behalf of those claiming
self-employed status
-
Commercial Contracts
A full range of industry-tested commercial trading contracts
-
Internal Documents
Internal rules and contracts and external contractor regulations
-
Disputes / Negotiations
Assistance with contractual disputes & negotiations
Contact us to speak to us about your own circumstance.Please note that we do not provide CIS cards or CIS tax certificates ourselves. To obtain these please contact your local HM Revenue & Customs enquiry centre. Relevant Links:
New CIS Regulations - The Income Tax (Construction Industry Scheme) Regulations 2005, SI 2005 No 2045 HMRC Enquiry Centres - http://www.hmrc.gov.uk/enq/index.htm |