OPINION — CIS again up for review

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    From our friends at UKdivingbrotherhood’s weblog (ukdivingbrotherhood.wordpress.com)

    Ahh, bless the treasury, for once again this department is looking at an age old subject of “false self-employment” in the construction industry which would include those working in the inland inshore sector under the CIS scheme.

    What I find amusing is the government have been trying to address this since the early 1970s and every attempt has proved futile as companies get round the existing laws and they have admitted “earlier measures have had only limited success in tackling this situation”. I suppose that is HMRCs way of saying we are clueless.

    But what is interesting from the facts and figures is this, in 2007/08, there were 300,000 subcontractors operating within the Construction Industry Scheme (CIS) who did not claim any deduction for the costs of materials, or for plant and equipment, which strongly suggest they should be employees.

    So the government has new proposed criteria to classify truly self employed in the construction industry which 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 for themselves 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.

    These three criteria are proposed because the existence of any one of them would be sufficient to indicate self-employment under the current employment status rules.

    If this is the required criteria the inland inshore divers will become employees and not be allowed to be self employed for tax purposes only.

    Then the government says this. “The deadline for commenting on the consultation is 12 October 2009. No date for introducing the measures is suggested in the document. There is, instead, a commitment that the measures developed as a result of the consultation will only take effect when the construction industry is in a stronger economic position”.

    Stronger position, bit like asking a farmer how things are and listening to the woeful tales as he steps back into his new range rover.

    Further information:

    http://www.hm-treasury.gov.uk/d/consult_falseselfemploymentconstruction_200709.pdf


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