HMRC Response to Consultations regarding Employment Status
March 11th 2010
HMRC has recently published its responses to the consultations from last year on:
- False Self Employment in Construction
- Social Security (Categorisation of Earners) Regulations relating to teachers, lecturers and instructors
Construction
Briefly, this relates to proposals to bring construction workers in the mainstream construction industry into PAYE and Class 1 NIC (Employer’s and Employee’s) unless they meet certain criteria relating to providing their own materials, equipment or labour. Based on the responses they received, HMRC now believes that it needs more time to consider this and will consult further. However, it believes that the principle of a legislative solution is the correct one so we can expect to hear more about this in due course. No detailed indication of timing has been provided, although HMRC has said that it would wait until the economic recovery position is stronger.
Teachers, Lecturers and Instructors
This relates to proposals to amend the regulations relating to individuals who work as teachers, lecturers or instructors on a self-employed basis, but who must nevertheless pay Class 1 NIC as a result of the 1978 Social Security (Categorisation of Earners) Regulations. Briefly, HMRC had intended that the regulations would be amended from 6th April 2010 which would bring within the regulations all teaching/lecturing/instruction of an academic or vocational nature, but would exclude that which was recreational. Also, these regulations would apply wherever the teaching was given (unless in a private dwelling and payment was made directly to the teacher). HMRC has now said that, based on the responses it has received, it also needs more time to consider this and will consult further.
For the time being the current regulations continue to apply and, despite the fact that HMRC is considering this further, the regulations do continue to apply in the vast majority of cases where teaching, lecturing and instruction is provided.
Full details are available via the attached link, which takes you to the HMRC news page. The Construction response was on 10th March and the Teachers/lecturers response was on 8th March
http://www.hmrc.gov.uk/news/index.htm
If you think you may be affected by this and need to consider it in more detail relating to your organisation’s position, please contact John Harling on 07768 446381 or e-mail jharling@edftax.co.uk
