HMRC recently announced the creation of a new taskforce in the Northwest and North Wales to target construction traders who are not paying tax, through suppressing sales or overclaiming expenses.
Ucatt welcomed the move but said that the scope of the investigation should be extended to ‘false’ self-employment.
Research conducted for the union in 2008 estimated that 400,000 workers in the UK were officially self-employed, under the Construction Industry Scheme, yet in any real terms were effectively directly employed. Ucatt says that this practice cost the Exchequer around £1.7bn a year in unpaid National Insurance contributions. Self-employed workers do not receive holiday pay, sick pay or redundancy pay, receive fewer benefits and do not have pensions. By being self-employed they pay slightly lower levels of employee National Insurance contributions and can claim expenses, via a self-assessment tax form.
Ucatt acting northwest regional secretary Jimmy Woods said: “The HMRC is right to crackdown on construction companies who are not paying the correct level of tax. However, it is wrong to target one form of deception while turning a blind eye to other forms of evasion.”
Mr Woods, added: “Not only do false self-employed workers not receive basic employment rights such as holiday pay but their employment status means that they are not denied state benefits and are unlikely to have provisions for their retirement.”