CIS clampdown slows occupational health drive

HM Revenue & Customs’ (HMRC) drive to get contractors’ employment status right, may be dampening small- and medium-sized contractors’ (SMEs) enthusiasm for an industry-wide occupational health scheme, according to industry insiders.

Sources have told Contract Journal that although many main contractors are keen to introduce free occupational
health screening for all their subcontractor’s staff, HMRC’s drive to weed out incorrectly classified self-employed workers may prevent any potential national roll-out.

Ideally, sources say, main contractors would like to open up the screening to all their subcontractors, as many see the benefits of taking ownership of the well-being of their suppliers because it improves integration and productivity.

Constructing Better Health (CBH), organised by the B&CE, UCATT, the TGWU, the Cons-truction Confederation and the Federation of Master Builders, is running a successful occupational health pilot in Leicester in the hope that it can be rolled out nationally.

However, strong tax laws and a deluge of proceedings against contractors by the HMRC over classification of
subcontracted labour’s employment status, is believed to be preventing the initiative from gaining momentum.

“There appears to be a conflict between tax and safety laws, with the Health & Safety Executive advising that contractors should look after their staff in respect to training, advice and occupational health,” said one source.

“However, main contractors are scared that if HMRC sees main contractors cosying up to subcontractors by offering their staff occupational health screening, they will think that the workers are actually employees of the main contractor and that the main contractor is trying to get away with not classifying them as employed to avoid paying taxes.

“It’s a shame, as there seems to be a real shift towards occupational health screening for SMEs – a vulnerable sector that hasn’t cottoned on to the importance of occupational health screening.”

Michelle Aldous, project manager for CBH, said: “Clearly this is an issue for employers. Morally they want to be doing the right thing, but have to be careful about the potential implications of how they treat subcontractors. 

“In the eyes of health and safety law, employers have the same responsibilities for directly employed workers and those employed under CIS. This creates some confusion between the requirements of health and safety legislation and the laws concerning tax and NI status. There is a real need to achieve clarity.”

In a statement, the HMRC said: “Providing healthcare is a factor that we would consider to indicate employment, but it is unlikely that it would be conclusive on its own. “Our approach is to consider all the contractual and practical arrangements of the engagement and, in looking at the whole picture, determine from the evidence whether or not the worker is in business on their own account.”