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False self-employment in the Construction Industry

In July 2009, HMRC published a new consultation document;

"False self-employment in construction: taxation of workers".

If the new legislation is successful, any workers within the construction industry who are operating under the guise of a self-employed person, but are in-fact performing their duties in the same or similar way as an employee of the end client, will need to have their income processed through PAYE. This is what HMRC refer to as “false self-employment” and will potentially bring IR35 to the construction world.

To meet the definition of self-employed, workers must provide:

  • Their own plant and equipment (over and above the normal tools of the trade)
  • All their own materials
  • Other workers to carry out operations under the contract and be responsible for paying them. 

The full consultation document can be viewed at

If you would like to discuss having your pay processed through PAYE, please do not hesitate to contact a member of our team on 01206 713680 or email us at

HMRC are consulting on when the new rules should be implemented and are welcoming comments on the proposal until 12th October 2009.