Construction Industry Status

Earlier this year it was announced that HMRC’s yield from construction industry investigations fell 34% between 2014/15 and 2015/16, down to £102m. This was the first fall in 3 years and it has been suggested this is the result of HMRC’s clampdown on ‘false’ self employment in the construction industry paying off since the changes to the verification process.

The main thing to note is it is definitely not because HMRC are reducing their compliance work on businesses within the construction industry. It can be a common myth for contractors and subcontractors within the construction industry that as they verify and report monthly then they are covered against any argument from HMRC on the old employed vs self employed issue.

The emphasis now rests on the shoulders of the contractor to ‘verify’ the subcontrator’s status. This not only involves basic checks of whether they are registered for income tax and national insurance, but should include a monthly check as to the status of their subcontractors and are they satisfied they are not employees.

The main areas of consideration continue to be :

  • Control
  • Substitution
  • Mutuality of obligation
  • Financial risk
  • Being part of the organisation
  • Provision of equipment

These areas are detailed and so if you require any further information or are concerned about your subcontract workers status please do not hesitate to contact me.

Article written by Dave Horn