Construction Industry Scheme: Could you be a contractor?

The Inland Revenue is to increase substantially the number of reviews it conducts into the employment status of construction workers. Yet it is not just the construction industry that is affected by the news. Dominic Haslam explains why all companies spending on ‘construction operations’ need to check whether they are affected by the Construction Industry Scheme and what their obligations might be.

In August 2004, the construction industry came under the spotlight as the Inland Revenue launched an initiative to review employment status within the industry. Over 55,000 letters were sent out to contractors and subcontractors, where the Inland Revenue had reason to doubt that a subcontractor’s employment status had been correctly determined. The Inland Revenue’s letter to contractors reminded them of their responsibility to determine whether an individual should be treated as an employee.