False self-employment in construction: taxation of workers

21 July 2009

HMRC have just issued a new consultation document titled: "False self-employment in construction: taxation of workers". HMRC is requesting all comments on the proposals should reach them by 12 October 2009.

The proposals are that all payment to people working in the Construction Industry, where in what HMRC refer to as "false self-employment", should be made after deducting PAYE and National Insurance (NICs) i.e. people will be deemed to be employed for tax purposes by the person paying them.

HMRC have just issued a new consultation document titled: "False self-employment in construction: taxation of workers". HMRC is requesting all comments on the proposals should reach them by 12 October 2009.

The proposals are that all payment to people working in the Construction Industry, where in what HMRC refer to as "false self-employment", should be made after deducting PAYE and National Insurance (NICs) i.e. people will be deemed to be employed for tax purposes by the person paying them.

PAYE and NIC would not need to be deducted where the worker provides one of the following:

• Their own plant and equipment (over and above the normal tools of the trade)

• All their own materials

• Other workers to carry out operations under the contract and is responsible for paying them.

For advice on PAYE, CIS (Construction Industry Scheme) or PAYE Umbrella Companies please contact PayMatters on 0800 121 6513.