HMRC consider the building trade to be a target of the broader “false” self-employment rules. By expanding the definition of personal service to “personally involved in the provision of services” many contractors and sub-contractors may be caught.
See our earlier post on the general outline of the new rules.
If you are self-employed and working through an agency or in a chain of contractors/sub-contractors then these rules could affect you.
If you are qualified and experienced in your work such that you are left to work alone you will need to provide evidence that you are controlled, directed or supervised by your contractor (or agency). HMRC have not made it clear what they consider to be acceptable evidence. There is some case law on control by way of the IR35 case law but there is no equivalent for direction or supervision.
If your contractor has doubts about your status you may be asked to set up as a limited company. As a shareholder and director of your own limited company you would take your profits as a salary and dividend and therefore you will fall outside these new rules.
If you are the contractor that contracts directly with the end-client you will need to keep evidence to support the self-employed status of your sub-contractors. The proposals also require the supply of quarterly information on your self-employed /sub-contractors workers.
The proposal suggests that contractors will need to collect the following information on all their self-employed workers:
- NI number
- Date of birth
- Reason why income tax and NICs not deducted
- Name and address of intermediary
If you need help in setting up a limited company then please contact Clearways Accountants via the contact form below or by telephoning 01737 244298.