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Tax inspection cuts open door to false employment scam

SWINGEING cuts to the number of tax inspections in the construction industry are allowing rogue bosses to flout laws on bogus self-employment, HM Revenue and ­Customs (HMRC) revealed yesterday.

New figures released by the department show what has been described as “collusion” between the Tory government and big business tax-avoiders.

HMRC has dramatically reduced its construction industry inspection work, with 5,330 inspections in 2012-13, 3,560 in 2013-14 and a mere 2,420 in 2014-15.

The figures were obtained by construction union Ucatt following a freedom of information request to HMRC.

The union said it was horrified to discover that the government department was paying less and less attention to the notorious tax avoidance method known as false self-employment.

“Tax avoidance practices are the blight of our industry and are growing year on year,” said Ucatt acting general secretary Brian Rye.

“Yet HMRC is doing less and less to catch the culprits. It’s a national disgrace.”

False self-employment occurs when a worker is designated as self-employed but has most of the characteristics of an employee.

Such workers are denied holiday pay, sick pay and can be fired at a moment’s notice.

By falsely self-employing workers the real employer avoids paying employers’ national insurance contributions of 13.8 per cent per worker, making the unlawful practice highly lucrative for bosses at the expense of their workforce.

“If ever there was a clear indication that this Tory government is predicated entirely on enriching the bosses — this is it,” said Mr Rye.

“Construction workers are honest, hard-working people forced into this bogus and entirely false self-employment status purely to enrich the corporations and those that run them.”

Ucatt warns that the illegal practice is growing and yet the HMRC figures show that in the last three years the number of construction companies fined for exploiting bogus self-employment has dropped from 57 in 2012-13 to fewer than five companies in 2014-15.

HMRC “should not be an agency for the rich. It should serve all the people of Great Britain,” said Mr Rye.

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