Tax officials have confirmed they will be taking on the issue of false self-employment as part of a major crackdown on labour agencies.

Last month it was announced that HM Revenue Customs would be appointing 100 extra inspectors to find agencies believed to be dodging £500m in tax payments.

The Revenue has now confirmed it will also be examining the tax status of workers as part of the campaign.

The news will shock employment agency chiefs who were hoping the spotlight had shifted from employment status as the Government encouraged a flexible workforce due to the current economic climate.

Union chiefs were delighted the net will be increased to include the problem of agencies wrongly applying employment status laws so they are able to avoid paying employers National Insurance contributions and other benefits such as holiday pay.

George Guy Acting General Secretary of Ucatt, said: “The confirmation that the HMRC is cracking down on false self-employment being undertaken by employment agencies is welcome news.”

“False self-employment is endemic in agencies operating in construction and is costing the taxpayer millions of pounds every year in lost revenue.”

“Employment agencies must realise that they can no longer get away with falsely self-employing workers and denying them the most basic employment rights.”

Kevin Green, Chief Executive of the Recruitment and Employment Confederation, said: “We are committed to working effectively with the Government to address examples of bogus self-employment.”

“However, it is also critical for the UK economy that we promote legitimate self-employment.”

“If we want to retain a dynamic construction industry in the UK we need to retain its use of a skilled and flexible workforce.”

“Payroll companies help the self employed particularly with the administration of pay. Together with the review of iR35, we urge the Government to look into this whole area as part of their commitment to help small businesses and entrepreneurs.”

BuilderScrap sourced this article from Construction Enquirer.