A recent appeal by the Chartered Institute of Taxation to Government asking them to rethink the proposals on False Self-Employment in Construction, coupled with the publication of our IR35 anniversary special report, got me thinking about how much really poor legislation has been targeted at contractors, the self-employed and small businesses.
In fact, if you are not a permanent employee, then it appears that the government has something against you. And what’s more, the apparently sham ‘consultations’ and follow-up legislation appear to have been created by those in total ignorance of the reality of the real world. This has clearly been the case with IR35, and unless government chooses to listen, will undoubtedly be the case with the Agency Workers Regulations and any new legislation that follows the False Self-Employment in Construction consultation.
If you take the latest construction consultation, which we reported on back in July, you’ll see why the real world should matter. The government wants to force as many workers into employment as possible. That seems like a reasonable idea from the government’s point of view, as collecting tax via PAYE is quickest and easiest. But, at the risk of spelling out the bleedin’ obvious, most construction output is based on irregular projects, not regular ongoing work.
Plus (and this might come as a shock to those behind their desks in Whitehall) most construction is done outside, so if it rains or snows for example, it’s not terribly safe to allow site staff to continue working. That means construction workers, particularly labour-only site trades, are not required five days a week, 52 weeks a year, for the lifetime of their careers. Even the most sought-after labourers and construction-site tradespeople frequently can’t work if site conditions don’t allow it.
However, the government would have construction companies take all their labour-based workers on as full-time employees, which would drive up costs in the industry and make UK firms employing UK-based (and taxed!) workers uncompetitive, ultimately resulting in fewer jobs and lower tax revenues. In addition, it is highly likely that a huge number of construction workers would be forced to work on a cash basis in the domestic construction sector, thus entering the black economy, leaving the commercial sector with further skills shortages and hitting the government in its own pockets.
It seems ridiculous to have to point out such obvious truths to a government elected by us, to serve us. But we have an administration that appears to have lost sight of the ‘real world', and one that does not learn from its mistakes. And so many of those mistakes have been and continue to be at the expense of the non-employed – contractors, freelancers, small businesses and the self employed.
How much more of these mistakes are we, contractors and the non-employed, expected to endure?