§ Mr. HancockTo ask the Secretary of State for Trade and Industry what assessment has been made of the need to review the tax system in regard to national insurance contributions lost owing to false self-employment claims on CIS4 tax certificates; and if she will make a statement. [63098]
§ Dawn PrimaroloI have been asked to reply.
I would like to clarify the relationship between the CIS and employment status. The CIS sets out how payments to self-employed sub-contractors should be treated.
As in all industries, whether a worker is categorised as employed or self-employed depends entirely on the terms and conditions under which they are engaged. The fact that a worker is registered under the CIS and is in possession of a certificate or registration card does not of itself confer self-employed status on that individual. It is entirely possible for workers to be employed on one contract, and self-employed on another.
468W
§ Mr. HancockTo ask the Secretary of State for Trade and Industry what measures are being taken to address organised avoidance of national insurance payments through false claims on CIS4 tax certificates; and if she will make a statement. [63103]
§ Dawn PrimaroloI have been asked to reply.
The Construction Industry Scheme (CIS) sets out how payments to self-employed sub-contractors should be treated. It is anti-tax evasion legislation and it has successfully identified workers who had previously not declared their earnings to the Inland Revenue.
Where a person works as a sub-contractor on a contract to which the CIS applies, they must register with the Inland Revenue. Where a sub-contractor does not qualify for a certificate allowing him/her to be paid gross, they will receive a CIS4 registration card. They will then be paid for work done after a deduction on account of tax and national insurance.
The tax and national insurance rules, which distinguish the employed from the self-employed, are intended to apply to all workers. As part of its compliance strategy the Inland Revenue's local employer compliance review teams consider employment status issues when undertaking reviews to ensure employers and contractors comply with their tax and national insurance obligations.