Provided by Construction Enquirer.
George Osborne is determined to stamp-out false self employment in construction and has snubbed industry pleas to delay the clampdown.
The Chancellor is expected to confirm in today’s Budget that new laws will be introduced on April 6 which will shift at least 200,000 construction workers into direct employment.
HM Revenue & Customs documents seen by the Enquirer detail industry objections to the plan during a consultation exercise since the proposal was unveiled in last year’s Autumn statement.
Labour agencies and payroll companies have led the campaign against change with many facing an uncertain future as workers go back on the books.
Contractors are also worried that labour rates could rise by up to 25% in National Insurance contributions and holiday pay.
HMRC received more that 100 responses to its plans.
But only eight contractors bothered to take part in the consultation as the full implications of the move are yet to hit home with many firms.
Most respondents supported the crackdown but many were worried that the April 6 deadline was too soon and the moves should be delayed by a year.
But the Revenue has decided against a delay because it fears payroll firms and agencies will come up with new schemes to promote false self employment.
It said: “Almost half of stakeholders raised concerns both over the shorter consultation period and that the legislation was being introduced too quickly, suggesting that the measure should take effect from April 2015 instead.
“Having considered these arguments the Government believes delaying implementation would provide the opportunity for new avoidance arrangements to be put in place and therefore implementation will not be delayed.
“This legislative change is to address mass-marketed avoidance of the existing legislation and delays in bringing it in would provide a window for those trying to circumvent the legislative intention, in which for them to devise new avoidance arrangements.”