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Changes in the industry: My view of the last month

David Jackson | 10th June 2014

Some things change. Some don’t.

One thing’s for sure – those who use employment agencies to find work on construction sites have discovered the way they are taxed has changed. They cannot be paid any longer as self-employed, and many have been ‘signed up’ into umbrella schemes, then taxed as though they are employed, but without receiving any of the standard PAYE employment rights. Union bosses have been quick to stand up for their members in demanding direct employment, and in such circumstances, I believe this is quite right.

Another upcoming change, unveiled in the Queen’s Speech, indicates that targeted anti-avoidance rules are now very much on the Government agenda, with a crackdown on avoidance involving offshore employment intermediaries and employment intermediaries that facilitate false self-employment. The rule will focus on whether arrangements have been set up to avoid or to pay lower NICs and I can only think such a measure could apply to those asking agency workers to ‘sign up’ to umbrella schemes. . .

During the past month, when I was invited to take part in a discussion with MPs, I was also made aware that the Government plans to make further changes to employment laws and the tribunals process, together with an extension of employee rights to flexible working.

So all in all, I can see a great deal of change affecting the construction workplace this year.

So what’s not changed?

According to a client working in the London area, there’s a definite shortage of skilled construction tradesmen – and those who choose to be self-employed, working for outputs realised, are commanding premium rates and tax deduction under CIS. “None of the good guys are going on the books,” our client told me. Which is just as well, since the housing shortage observed by all politicians has not changed.

Another client thought my move from Managing Director to Chairman of Hudson Contract was a step towards retirement or resignation of my directorship. Happily, I was able to assure them this is not the case. I remain as committed as ever to servicing our clients and investing heavily in the years to come. So there’s no change there.

Our compliance with tax and employment laws also remains unchanged. Every challenge has been met since 1996 and every step possible has been taken to ensure our continued compliance this year and in the long-term.

Finally – and guess what – the construction union’s position hasn’t changed either. In an article on a BBC website this month, UCATT general secretary Steve Murphy, claims “Forty per cent of all construction workers are officially self-employed but should really be classified as being employed.” This from a union that represents just 2.5% of the industry in terms of its membership numbers, and consistently claims 400,000 falsely self-employed people work in construction, without providing any basis of statistical evidence.

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