ECH11040 - Status: Construction Industry Workers - Background

In the 1990s, representatives of the construction industry became concerned that

• increasing numbers of workers were treated as self-employed when in fact it was recognised that many were really employees
• where such workers were laid off they often persuaded an Industrial Tribunal that they should have been employees all along
• following the tribunals decisions engagers would receive demands for tax and NICs.

The representatives therefore asked for specific guidance to help contractors determine the correct status of workers. As a result a Press Release was issued in 1996 to help with the issue.

• Contractors were given time to review the status of their workers, and set up PAYE and NIC arrangements where necessary.
• Contractors were expected to have completed these reviews by 5 April 1997 and be accounting for any PAYE and NIC by that date.
• Where after that date, contractors were found not to be accounting for PAYE and NIC where appropriate, arrears would normally be sought back to April 1997.

ECOs who consider status in the construction industry should

• take account of this information
• not normally recover for years prior to April 1997 even when extended time limits apply ( ECH22130)
• follow the guidance in ECH11045.