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23 Sep 2009
When the usually diplomatic tax expert Francesca Lagerberg describes the title of a new consultation document from the taxman as “inflammatory”, then advisers should sit up and take notice.
The national head of tax for Grant Thornton has put the boot into HM Revenue & Customs’ latest foray into the tax affairs of the construction industry.
HMRC’s “False self-employment in construction: taxation of workers” looks at recouping tax from an estimated 300,000 workers who operated on sites without supplying their own tools, who “are the most likely to be falsely self-employed”.
The taxman believes £350m is lost annually through these workers failing to pay enough tax and national insurance.
The main bone of contention surrounds three tests on the provision of workers own equipment and materials. Meeting the criteria could see workers classed as employed.
“It’s a very controversial document,” said Lagerberg on Accountancy Age TV. “The tests are too broad, capture potentially too many people and need more consideration.”
Anne Redston, visiting professor at Kings College London, said bringing formerly self-employed workers onto companies’ payroll would cause a huge admin burden.
“With the construction industry in the doldrums this must be bad from the government’s point of view. Advisers must read this document.”
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Visitor comments Add your comment
Lumpish proposals
Isn't this the latest in a long list of failed procedures : CIS/ previous CIS scheme/ 714/SC60 - not an exhaustive list of attempts by HMRC to control the " lump". Undoubtedly there will be " cowboys" who will always choose to evade, but all these proposals bear heaviest on the freelance worker who in the best of times , which is not now, struggles to obtain a little work in an industry that usually only has brief projects.
Posted by: Barry, 23 Sep 2009 | 00:00
so called false self employment
This looks to be discrimatory and unlawful. A person who meets the usual case law criteria for self employment in any other sector than construction will be self employed without any further hassle.
The construction industry subbie will be penalised because the government are clearly an implacable enemy of this industry having singled them out for special treatment yet again.
We end up with the crazy situation that a skilled operator of complex plant (a suitable case law would be hall v lorimer) in the forestry industry will meet the self employed status tests if the contracts are right, but the same man ,doing the same operation in the construction will be "deemed" to be employed.
we might just as well substitute the words forestry and construction with black and white or men and women and then all hell would break loose on the grounds of unlawful discrimination.
eg a white man is deemed to be innocent until proven guilty, but a black man is deemed to be guilty until proven innocent.
You can see where I am going here, so for god's sake stop attacking the poor old subbie who only wants to do a fair days work for a fair days pay under the same rules which apply to everybody else
Posted by: GR Morter FCA, 23 Sep 2009 | 00:00
IT IS NOT COMPULSORY TO PAY DIRECT TAXATION
Most auditors know that it is not a legal obligation to pay direct Taxation. it is but a simple matter to avoid this tax.
It is then within your grasp to take complete control of all direct Taxation as imposed by Westminster. Only it is now up to thr Taxpayers to take complete control of the system. IT IS NO LONGER, HOW MUCH YOU ARE PREPARED TO PAY; More a matter of how much you prepared to allow these basta**** to steal from your income. REMEMBER, IT IS YOUR BLOODY MONEY. Don't let them steal it. At anytime. Regards ATFlynn,
"Norfolk's Mutineer"
Posted by: flynn354@btinternet.com, 23 Sep 2009 | 00:00
Emigrate
I guess subbies should do what many IT contractors have had to do to avoid persecution by HMRC ? emigrate to Australia. Then come back into the country as a ?non-dom? working through a Canadian offshores ? that way you get treated with the light touch that HMRC affords citizens of other countries, rather than the persecution it gives to ordinary, hard-working, freelancers who are subjects of Her Majesty.
Posted by: Bob The Code Builder, 24 Sep 2009 | 00:00
HMRC IS RIGHT
Every one should pay their fair share of taxation and this includes professional practices. Why should those employed subsidise the self employed? Let's face it, it is those employed who pay the most tax and NI burden in this country. I was both an employee and self employed. Under self employment, I could offset my day to day expenditure e.g. vehicle expenses, depreciation, and much more like pension, dividends to mitigate tax and NI. Now could the employed do this? No wonder the self employed are the wealthier ones. It is time that the government took tougher action as in Eire, Australia and USA etc. We are too lax in the UK. No wonder the whole world wants to descend over here to get rich quick. That said, we want to cut down on privy purse and public sector waste, governmental salaries and perks as most of our political work has been outsourced to the EU. India and China will kick our ass! if we do not smart up soon. Those who don't like our system, can vote with their feet and seek greener pastures abroad to Eire. They will soon come knocking back, I promise. Free education, free health, free housing, all the benefits that you can claim! Why go elsewhere? They are all queuing at Sangette, Calais, France after having risked their lives on high seas etc to get into the UK. Why not dear France or Sapin, or Dublin? Be proud of your country and build it to the envy of the world and this is where accountants should play thier part to the fullest. "Put the country first before your interests" - President Kennedy.
Thank you.
Posted by: Mohamed Hall, 25 Sep 2009 | 00:00
Have the Revenue thought anything through?
Having dealt with subbies in the Construction industry for some twenty five years, I can truly say the Revenue have always tried to find ways to foul up the system they put in! If they succeed with this bad and I think "illegal" legislation for subbies, and aContractor has say fifty on his books which he uses for the odd two days here and there, would the Revenue be able to copy with the P35s sent over the net for every two day subbie job and possibly the same amount of P46s this could be an administrative nightmare!
Posted by: PSA Cooper, 26 Oct 2009 | 00:00