What is 'False Self-Employment'

The HMRC are determined to drive out false self-employment and some would argue self-employment altogether. As far as the HMRC is concerned the system has been abused for many years.

For now at least, they say they have no issue with as they see it genuine, self-employment 1) Bidding for work. 2) Buying plant and materials. 3) Working on a price with all the risks, consequences and penalties if something goes wrong. 4) The flexibility to do the work when and how the individual self-employed worker sees fit.

But over time the industry has developed a new class of false self-employment, where the workers who are working under CIS:

  • Are paid hourly
  • Bear none of the financial risks if things go wrong, they still get paid
  • Provide their services as labour only (providing no materials and hand tools)
  • Crucially for the most part are under the direction and control of the person or company that pays them, working as directed

This is what the HMRC is vigorously classifying as false self-employment and are determined to rout out.