HMRC have indicated that they are considering reclassifying self-employed construction workers as employed. They have actually launched a consultation process with interested parties. Reclassified workers would be taxed through the PAYE system regardl
ess of the length or brevity of each employment assignment.
HMRC are convinced that a significant number of construction workers are taxed as if self-employed even though they are providing their ser
vices to contractors effectively as if they were employees.
HMRC are calling this status issue “false self-employment”. HM
RC plan to introduce legislation to protect income tax and national insurance revenue that they feel is being lost.
The consultation document that HMRC have published assumes that these changes will happen and simply seeks input as to how such changes should be introduced.
Comments on this proposal have to be sent to HMRC before the 12 October 2009; so change, if it is coming, may not be that far away!