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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: status: construction industry workers - background

In the 1990s, representatives of the construction industry became concerned that

  • increasing numbers of workers were treated as self-employed when in fact it was recognised that many were really employees
  • where such workers were laid off they often persuaded an Industrial Tribunal that they should have been employees all along
  • following the tribunals decisions engagers would receive demands for tax and NICs.

The representatives therefore asked for specific guidance to help contractors determine the correct status of workers. As a result a Press Release was issued in 1996 to help with the issue.

Contractors were given time to review the status of their workers, and set up PAYE and NIC arrangements where necessary.

Contractors were expected to have completed these reviews by 5 April 1997 and be accounting for any PAYE and NIC by that date.

Where after that date, contractors were found not to be accounting for PAYE and NIC, in appropriate cases, arrears would normally be sought back to April 1997 (within normal time limits).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) COG915255(This content has been withheld because of exemptions in the Freedom of Information Act 2000) COG915245(This content has been withheld because of exemptions in the Freedom of Information Act 2000) ).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

When considering the recovery position for status in the construction industry you should

  • see COG907620 and COG907630
  • follow the guidance at COG915245 onwards, but
  • not normally recover for years prior to April 1997 when extended time limits apply (COG915220), unless
  • you have established deliberate intent by the contractor, to keep the workers as self employed.