Construction braced for freelance tax disruption

Grant Prior 4 weeks ago
Share

Major contractors are trying to shift freelance construction professionals back on the books as new tax rules loom.

The Enquirer has been contacted by worried white collar workers as major contractors carry-out audits of their freelancers.

HMRC rules are changing next Aprl making contractors liable for determining the tax status of off-payroll professionals

One worker said: “I’m on a major civils site and the main contractor is telling professional freelancers that they will have to go PAYE.”

Current rules allow workers to be employed via a personal service company (PSC) which determines whether IR35 tax rules should apply.

That responsibility will shift from April to contractors who will determine employment status.

One major construction company said: “We want to get ahead of the curve with this so we are talking to all our freelancers now to see what their future tax status should be.

“We are one of the first having a proper look at this but it will effect all major contractors.”

Freelance workers fear they will lose out through higher tax payments while contractors will also face bigger bills from direct employment.

But taxation experts say contractors shouldn’t panic.

Ian Anfield, managing director of Hudson Contract said: “With nearly six months to go before the IR35 changes come into force, there is no need for employers to rush into a ‘one size fits all’ PAYE solution, there is plenty of time to carry out genuine status determinations and get this right.

“We are helping a number of firms go through the process to determine which limited company freelancers need to be ‘encouraged more strongly to take permanent positions’ and which can remain as they are if they wish.

“Negotiations can be tough with those perceived caught because they have enjoyed the flexibility and cost efficiency of self-employment for many years, becoming an employee will be a culture shock.

“So rather than jumping the gun, firms need to understand that the majority of technical level freelancers are not caught by the current IR35 rules and will not be in April 2020, the shift in where the status risk lies will not change how status is determined.

“Like any other business risk, IR35 can be managed or eliminated and needs to be balanced against other risks such as losing the services of some of the best people in the industry – who will fiercely defend their right to be self-employed.

“The worst of all worlds is that these people are pressured into umbrella schemes under which they carry all the costs and downsides of employment with none of the benefits – no doubt the most valuable freelancers will vote with their feet if this happens.”

An HMRC guide to the changes can be found here.

Latest news

London office starts slump by nearly half

Contractors use of non-UK labour in Capital falls from a third to a quarter of workforce
9 hours ago

Kier suffers shareholder revolt over chief’s pay

Almost 54% of shareholders vote against board pay
2 days ago

Cladding probe after Bolton student block blaze

Latest fire raises more questions over cladding
10 hours ago

Weston and Tesco submit plan to turn store site into 1,280 homes

Major mixed-use scheme planned for Goodmayes in East London
1 hour ago

Kingspan UK insulation sales fall 15%

Building products giant expects weak sales to continue next year
1 hour ago

Goldbeck lands £31m Gatwick car park deal

Latest win adds to recent successes in aviation sector
2 hours ago

String of M&E wins sees HE Simm touch £100m turnover

Repeat business for satisfied clients boosts results at specialist
2 hours ago

Interserve restructure paves way for possible break-up

Chief executive Debbie White to step down by end of December
3 days ago

Kier Chief Operating Officer leaves as cost cuts continue

Claudio Veritiero joins 1,200 staff set to go by next June
3 days ago

Eurovia trials robo-cars to ferry tools to highways sites

Driverless delivery vehicles will also survey road conditions as they go
3 days ago

PDR Construction starts Arco HQ in Hull

£16m project marks major milestone in £80m waterfront regeneration
3 days ago

Crossrail traffic marshall threatens passer-by and kids

Bond Street station subcontractor sacked after confrontation with public
3 days ago

Multiplex Europe chief Ashley Muldoon exits

Muldoon steps down after 22 years in top management shake-up
4 days ago

New-build housing completions top 200,000

Completions rise to the highest level since the 1980’s
4 days ago

Interserve chalks up 15th school project this year

Specialist needs school to be built in Oldham
4 days ago

Styles & Wood chiefs leave the business

CEO Tony Lenehan and finance boss Phil Lanigan depart
4 days ago

Commonwealth Games aquatic centre cost soars by 20%

Wates to start building work in January after £73m budget sign-off next week
4 days ago

New safety template in fight to prevent falls on site

New industry-standard guide launched: Download free now
4 days ago

Plan in for £365m Salford Cotton Quay scheme

Cotton Quays will include 37 and 48-storey buildings
3 days ago

Carillion liquidator to clawback £510m

Financial watchdog to consider whether to take action over conduct of directors in March
5 days ago

Graham wins £26m Poynton relief road

Main works on 3km Cheshire road to start next May
4 days ago

Interserve hires new construction commercial director

Ben Edwards takes up new role after seven years in Middle East
5 days ago

Developer fined £600,000 for white finger outbreak

Groundworkers suffer Hand Arm Vibration Syndrome on Places for People sites
4 days ago

British Land makes £200m profit on luxury Mayfair flats

Developer hails "highly successful" Clarges scheme
5 days ago

Network Rail plans Dragons’ Den to drive SME innovation

Rail infrastructure on track to deliver a third of spending via SMEs by 2022
5 days ago

Balfour tops October contracts league after road win

Morgan Sindall unseats Kier with the highest value of orders over last 12 months
5 days ago

Plans go in for 20-storey Bolton tower

Seddon lined-up as main contractor for major mixed-use scheme
5 days ago

Galliard to start luxury apartments above Crossrail station

Go-ahead for £140m residential scheme above delayed station
6 days ago

Co-op signs new maintenance deal for all stores

Trio of winners for five-year deal covering 3,500 food stores and funeral homes
6 days ago

Boost your online presence – join the Enquirer Directory

Site for suppliers and buyers showcases products, services and latest stories
2 years ago

Contractor services