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Double blow for self employed
00:00 08 Aug 1996
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The use of self-employed labour on construction sites is likely to
be "dramatically" reduced in the wake of a pincer attack by the
Contributions Agency and the Inland Revenue, according chartered
accountants Moores Rowland.
Mike Sutherland, manager in the accountants' remuneration services group, commented: "Construction companies should be aware of the implications of a new drive by the Contributions Agency. They may receive a visit from Agency inspectors who are attempting to re-classify many self-employed people as employed staff."
He continued: "The construction industry has a history of tax evasion. If companies are found to have been using self-employed subcontractors when they should have employed them, they may be forced to pay the unpaid PAYE and National Insurance plus interest and possible penalties usually for at least the previous six years."
Sutherland said the biggest mistake for contractors would be to accept possession of a 714 tax deduction certificate as evidence that an operative is self-employed.
Firms have already been warned that the Inland Revenue is also making widespread checks on the employment status of operatives in the light of fresh guidelines on how to determine whether a worker is genuinely self-employed. It has said that there will be no excuses for businesses caught out wrongly classifying their workforce.
Labour suppliers have been advised that their operations are likely to come under the scrutiny of both the Revenue and the Contributions Agency in an Autumn crackdown.
l New guidelines and procedures on tax refunds to SC60 operatives have been issued by the Inland Revenue. The guidance relates to interim refunds of tax pending receipt of a full tax return at the end of the year.
It is intended to ensure that, as far as possible, no part of the repayment will itself need to be recovered at a later date. More interim claims from the estimated 450,000 workers on the SC60 system are likely as a result of the introduction of tax self assessment.
Mike Sutherland, manager in the accountants' remuneration services group, commented: "Construction companies should be aware of the implications of a new drive by the Contributions Agency. They may receive a visit from Agency inspectors who are attempting to re-classify many self-employed people as employed staff."
He continued: "The construction industry has a history of tax evasion. If companies are found to have been using self-employed subcontractors when they should have employed them, they may be forced to pay the unpaid PAYE and National Insurance plus interest and possible penalties usually for at least the previous six years."
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Sutherland said the biggest mistake for contractors would be to accept possession of a 714 tax deduction certificate as evidence that an operative is self-employed.
Firms have already been warned that the Inland Revenue is also making widespread checks on the employment status of operatives in the light of fresh guidelines on how to determine whether a worker is genuinely self-employed. It has said that there will be no excuses for businesses caught out wrongly classifying their workforce.
Labour suppliers have been advised that their operations are likely to come under the scrutiny of both the Revenue and the Contributions Agency in an Autumn crackdown.
l New guidelines and procedures on tax refunds to SC60 operatives have been issued by the Inland Revenue. The guidance relates to interim refunds of tax pending receipt of a full tax return at the end of the year.
It is intended to ensure that, as far as possible, no part of the repayment will itself need to be recovered at a later date. More interim claims from the estimated 450,000 workers on the SC60 system are likely as a result of the introduction of tax self assessment.
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