Construction scheme slammed

Construction union UCATT has labelled the government’s Construction Industry Scheme (CIS) as not fit for purpose.

The CIS sets out the rules for how payments to subcontractors must be handled by employers in the construction industry.

However, an investigation by UCATT found that the government couldn’t provide information on how many building firms are ignoring employment rules by falsely registering workers as self-employed.

UCATT recently reported that false self-employment was affecting 400,000 construction workers and was costing the Exchequer £1.9 billion a year in lost tax revenues.

The union has warned that when companies use falsely self-employed workers to avoid paying Employers National Insurance contributions, the workers are denied basic employment rights: they do not receive holiday pay, sick pay, or pension payments and can be sacked at a moment’s notice.

When the CIS was revised in 2007, it became the responsibility of the employer to correctly register workers under the scheme. Employers were told that they would be fined if they wrongly recorded the employment status of workers.

Despite this, a Freedom of Information request issued by UCATT found that HM Revenue & Customs was unable to provide any information on how many companies have received fines for wrongly recording the employment status of construction workers.

A similar inquiry by Labour MP Natascha Engel resulted in her being told that the information could only be provided at disproportionate cost.