Government plans to tighten criteria on self-employment in construction are put on hold

The government has committed to hold off on plans to crack down on false-employment in the construction industry until after the end of the recession.

In a response to a Treasury consultation on plans to tighten up the criteria under which builders can claim they are self-employed, the government said it would consider and revise plans further before introducing new rules.

The Treasury said it was still committed to introducing the plans, but would look at the nature of the tests it had proposed to determine self-employed status. In addition it said it recognised that: “Most respondents who commented on timing agreed that, given the current economic outlook, it would not be appropriate for the deeming test to be introduced in the very near future.”

The Treasury said in July last year it was looking to stop builders who work just as labourers on sites falsely claiming self-employment in order to avoid paying income tax. Many in the industry, particularly on the housebuilding side, said this would hit building costs and damage the industry in recession.

The Treasury conceded that the “overwhelming” view of responses to the consultation was that the proposals “would not achieve the aims set down in the consultation.”

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