Home News Clampdown on self employment to go ahead

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The Chancellor George Osborne has confirmed plans to clamp down on tax avoidance with moves to tackle bogus self-employment.

The Treasury says around 300,000 workers in the construction sector are in bogus self-employment, costing HMRC more than £380m in lost revenue.

The PAYE and NI rules currently accept that a self-employed worker finding work through an agency is still self-employed and should be taxed as such. But from next month, if the worker personally carries out the work, or is involved in the provision of the services, payments will have to be payrolled, so the worker will have tax and employee NICs deducted at source. The agency will also become liable for employer NICs.

The measures are part of plans to reduce tax avoidance and aggressive tax planning, including preventing employment intermediaries from disguising employment as self-employment to avoid tax. The new measures come into effect in April 2014.

Other announcements in today’s budget include extending the Help to Buy equity scheme for new-build homes to 2020 and a commitment to support for building of more than 200,000 new homes.

Chris Temple, from business consultancy giant PwC , said: “House building needs a significant push, so it is good to see the £500 million investment into small house building firms, which has obvious employment connotations too. However, space is at a premium, especially in London and the south-east, where the Chancellor identified a specific need for new housing. To really kick-start the industry, I would like to see greater incentives for public and private landowners to sell sites to developers.

“There was a definite focus on first-time buyers in this Budget announcement, with plans for 200,000 new homes to be built nationally meaning good news for those interested in the Help To Buy scheme, both developers and purchasers. The confirmed new garden city in Ebbsfleet will be of great appeal to young professionals looking for a property in the commuter belt.”