By Simon Basketter
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Construction bosses provoke anger with new tax scam

This article is over 10 years, 1 months old
Issue 2398
Construction workers protest in 2011

Construction workers protest in 2011 (Pic: Guy Smallman)

Construction workers are resisting new attacks on the way they are employed. Changes to the rules governing self-employment should have made it harder for construction bosses to use bogus self-employment as a tax scam.

But in response the building bosses have moved to make employment conditions for agency workers worse.

According to electrician Ian Bradley, “In 1999 I was earning £125 a day in London as a spark. Now, 15 years later, I’m earning £140 a day while seeing everything else triple in price and the cost of housing becoming so high that even barristers are being priced out of the city. Without doubt it is far better financially to be directly employed for a company. 

“Not to mention having the ability to organise on site to improve wages and conditions and not having to worry about the dreaded tap on the shoulder on a Friday afternoon telling you you’re not needed any more.”

Some 250,000 construction workers have been up to now wrongly included in the Construction Industry Scheme for self-employed workers. They should be treated as agency workers. As such after 12 weeks employment they are entitled to equal pay as direct employees and the same holiday pay.

But the building bosses are putting workers into new umbrella companies that sidestep the rules and make workers pay all the employer contributions and pay their own holiday pay.


And then they charge the workers a fee for doing so. The latest scam means workers may lose over a £100 a week. Workers will be worse off than they were with the previous bogus self employment. 

Some agencies are claiming that workers can make any drop in income back by claiming for expenses. Essentially they are encouraging workers to commit tax fraud—just to get paid. Numerous sites saw late starts and walkouts in protest last week. 

Over 30 agency electricians walked off of the job at Three Bridges Station, Crawley, Sussex, last Friday. The main contractor is Volker Fitzpatrick and workers worked for NG Bailey. In response bosses said they would be taken into direct employment.

The day before mechanical and engineering workers in Aldermaston struck against the scheme. On Monday workers for NG Bailey on the Tottenham Court Road Crossrail site downed tools. 

Protests and stoppages were planned for later this week. Many workers will only see the real effect of the new scam when they get paid. 

Safety comes last when subcontracting

The self-employment culture denies workers basic rights and means they do not have access to independent safety representatives. Subcontracting produces a multilayered false economy. Wages are forced down, and responsibility for paying for training, holiday, sick leave and pension rights is displaced down the subcontracting chain.

This forces cost savings to be made at every layer. It means that subcontracting encourages deskilling, and increases the risk of death and injury at work. The companies behind subcontracting are huge multinationals. The industry is wracked with corruption.

Bosses run blacklists to keep trade union militants off sites. Direct employment can be won.

How workers will lose from the latest scheme

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