Letter: Building abuse

Sir: Arthur Stitt (Letters, 19 May) need have no fears if he is genuinely self-employed since the Inland Revenue and the Contributions Agency are doing no more than reiterate rules that have been in existence since the 1970s. As long ago as 1983 the all-party Committee on Public Accounts was expressing extreme concern at the abuse of the 714 self-employed certificate scheme for the construction industry.

During the recession that abuse became more widespread as employers, in an effort to cut costs, forced existing employees into "self-employment". The "employer" saved on NI contributions, statutory bank holiday payments and sick pay. The quasi-self-employed workers found that they were not entitled to unemployment benefit when they could not find work, and that the insurance policies they had taken out to cover redundancies did not, of course, recognise the "redundancy" of the self-employed. All this combined to force many skilled workers out of the industry.

What is now happening is the withdrawal of a hidden subsidy to the construction industry in lost revenue in tax and NI contributions which was, in 1984, estimated to be between pounds 4bn and pounds 6bn each year.


London N22