‘False self-employment’ via intermediaries

Following announcements made as part of the Autumn Statement the government has announced some further information ‘false self-employment’ via intermediaries.

The government believes that employment intermediaries are increasingly being used to disguise employment as self-employment. The largest business sector being the construction industry where the government believes 200,000 workers are engaged via intermediaries. However, there are other sectors such as the driving, catering and security industries where there is evidence of existing permanent employees being taken out of direct employment and being moved into false self-employment arrangements involving intermediaries.

The central proposal is to make a change to the agency legislation so that it will apply to these type of intermediary arrangements where the worker is:

  • subject to (or to the right of) control, supervision or direction as to the manner in which the duties are carried out
  • providing their services personally
  • remunerated as a consequence of providing their services
  • receiving remuneration not already taxed as employment income.

After the change the intermediary will be responsible for deduction PAYE and NIC from the worker and paying employers NIC.

The legislation will be amended with effect from 6 April 2014.

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