Industry given chance to respond to government proposals to clamp down on bogus self-employment

The industry now has the chance to respond to government proposals to put all workers in construction on PAYE, revealed by Building last week. The consultation document can be downloaded at www.hm-treasury.gov.uk.

The tax proposal aims to clamp down on bogus self-employment in construction but it would mean higher tax bills for contractors and housebuilders. Contractors and housebuilders will be able to avoid putting workers on payroll if one of a list of certain conditions is met. However, industry commentators think the conditions are unlikely to be met in most cases.

The conditions are:

  • That the person is paid for materials as well as labour
  • That the person supplies other people’s labour as well as their own
  • That the person provides a substantial amount of plant

Contractors and housebuilders can calculate what the change will cost them by adding 13% to their weekly wage bill for labour-only subcontractors who don’t employ others or buy materials.

The industry has until 12 October 2009 to respond.

Anyone wishing to send their response via the Joint Taxation Committee can email Bridge at liz@thetaxbridge.com.