Trudy Gordon's Letter to Contract Journal

UCATT’s recent call for the abolition of CIS to end ‘bogus self-employment’ in the construction industry raises important issues.

There appears little evidence that HMRC’s definition of self-employment, even if understood, is being enforced, so it is unsurprising that construction workers are taking the apparently financially attractive self-employed route – whether or not they are entitled to do so.

The risks are that the Treasury loses revenue, individual workers may have poor employment rights protection, and (as in a recently publicised case) inadequate accident insurance.

Companies offering umbrella services for temporary workers are (rightly) heavily scrutinised for compliance with legislation, so working through an umbrella company is a ‘safe’ way for an individual to work. We make sure they have appropriate insurance cover, remit tax and NI to HMRC, and thoroughly check the identity and right to work of those from overseas.

Compliant providers of umbrella services provide a valuable service for employers, the UK authorities, and temporary workers (who are able to claim legitimate expenses). It seems nonsensical that all the checks are in this area, while construction workers who could not realistically pass HMRC’s self-employment ‘tests’ are being contracted on this basis without (so far, it seems) penalty for employers or workers.

The legislation is complex, and could benefit from the UCATT’s proposed simplification. But if it is to be made to work in its current form, the rules must be applied equally effectively across the board. If claiming to be self-employed brings financial advantage with no checks or forfeits, can workers be blamed for taking this route?

Trudy Gordon,
Managing Director, Gabem Management Limited