Small construction firms 'to struggle under worker tax changes'

Date: 23rd July 2009

The government has admitted that small businesses in the construction industry might find changes to the tax structure for contracted workers an "administrative burden".

Launching a consultation into false self-employment claims, the Treasury noted that workers who can be considered to be employees of firms should be paid through PAYE and NI systems.

However, the government added that 40 per cent of small businesses "who are not already operating a payroll and who have to apply the deeming provision are micro".

"In addition, small businesses may find accounting for PAYE and [National Insurance contributions] a significant additional burden," the consultation document stated.

"This is more likely to be the case where the small business engages only one or two workers for short periods on a sporadic basis. The need to operate the necessary starter and leaver processes on a frequent basis will increase the administrative burden for these businesses."