The Government has published the responses that it has received to its consultation exercise - “False self-employment in construction: taxation of workers”.
In spite of a number of adverse replies to the government’s proposals, it would appear that the government will press ahead with introducing three tests to determine whether a worker in the construction industry is deemed to be employed or not. If the worker fails the tests they will then suffer PAYE and NIC deductions, although they will not receive the same employment rights as full employees.
The three tests are: 1 Provision of plant and equipment – that a person provides the plant and equipment required
for the job they have been engaged to carry out. This will exclude the tools of the trade
which it is normal and traditional in the industry for individuals to provide to do their job;
2 Provision of all materials – that a person provides all materials required to complete a job; or
3 Provision of other workers – that a person provides other workers to carry out operations
under the contract and is responsible for paying them.
There were several suggested amendments to the proposed tests, and the Government has said that it will consider some of these before finalising any legislation. The original proposals were held back due to the state of the economy and the implementation date for any legislation is still dependant upon economic conditions.
Please contact us if you would like any advice regarding the implications of this legislation.
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