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Union asks HMRC to clamp down on false self employment practices of payroll companies
Posted Jan 7, 2011
Construction union, UCATT, has urged HMRC to investigate how some payroll companies have been registering workers as 'self employed' in order to slash employers' National Insurance bills.
A recent investigation by The Mirror found that a number of payroll firms had enabled employment agencies and employers to register construction (and other) workers as self employed, where in reality they were employees.
Of course, employers using payroll companies to manage staff remuneration can save a massive 12.8% in employer's NI contributions.
An additional benefit for employers (and not 'employees') is that the self-employed do not have the same rights as the employed - including holiday and sickness pay, and dismissal rights.
The union has written to both HMRC and David Gauke MP (the Exchequer Secretary) to demand an urgent investigation into the practices of payroll companies in the construction sector.
Alan Ritchie, General Secretary of UCATT, said: "There has been a huge growth in payroll companies. These companies do not perform construction work, nor do they hire labour to companies, their sole reason for existence is to enable companies to deny workers basic employment rights whilst avoiding paying national insurance contributions. The Government and the Revenue need to intervene to end these practices once and for all."
The union has also noted that since the Coalition came to power in May 2010, no further action has been taken on the previous Government's consultation into false self-employment in the construction industry.
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