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As a result, it is becoming more and more common that HMRC are carrying out Employer Compliance Reviews. To ensure that businesses are dealing with Employment Taxes, where sub-contractors are used. To ensure that the new regime is being operated. This will include a full review to the status of any subcontract labour that is used.
The main issue with sub–contract labour is that the employer is not responsible for any National Insurance Contributions. Whereas both Employee’s National Insurance of 11% and Employer’s National Insurance of 12.8% is deducted from employees of the business. The Inland Revenue feel that they are ‘out of pocket’. They are tightening up on sub-contractors who should be treated as employees.