Monday, 09 July 2007

Revenue Must Block Olympic Tax Abuse

Construction union UCATT have increased pressure on the Olympic Delivery Authority to ensure that fair working practices are introduced for the Olympics.

Talks between the ODA and the unions have been deadlocked over what form of employment model should be used to build the Olympics. Construction unions led by UCATT have argued that the Olympics should be built with 100 per cent directly employed labour. The ODA have insisted that contractors should be entitled to recruit bogus self-employed workers.

Bogus self-employment occurs through the Inland Revenue’s Construction Industry Scheme. The self-employment tax scheme for the construction industry is habitually abused. Companies register workers as self-employed when all employment tests reveal that they are in direct employment. Employers save money on national insurance contributions, do not pay holiday or sick pay nor pension contributions. Employees are denied employment rights.

It is conservatively estimated that bogus self-employment costs the Exchequer £2.5 billion per annum. Many workers employed through the CIS scheme with self-employed status have worked for a single employer for over 12 months.

UCATT have now written to Paul Gray chairman of the Inland Revenue and to Jane Kennedy the Financial Secretary to the Treasury, requesting to know, what measures are being put in place to ensure that abuses of the CIS system leading to widespread tax avoidance do not occur on the Olympic building project.

Alan Ritchie, general secretary of UCATT, said: “My union is doing everything it can to ensure that workers are properly employed at the Olympics. The Olympics should be built in a safe environment by workers in receipt of good pay and good conditions. It is entirely unacceptable to allow a situation where the ODA allows extensive tax avoidance to take place on such a prestigious public project.”

Due to the lack of employment rights, sites using bogus self-employment are usually unorganised. This means that they lack independent safety reps. They have a far higher rate of accidents, injuries and deaths than organised sites with independent safety reps.

Companies using bogus self-employment are highly unlikely to train apprentices either, as they do not employ anyone to do the training. One of the legacy aims of the Olympics is to inject skills into local workers living in the deprived London boroughs. This will not occur if contractors are allowed to use bogus self-employment.

Mr Ritchie, added: “You would have thought that with a chronic construction skills shortage in Britain, that all agencies would be falling over themselves to maximise the training of young people. The Olympics can be used to train the construction workers of tomorrow as well as giving lifelong skills to many of the most deprived young people in London.”

There is a growing fear that the ODA and the major Olympic contractors are trying to build the Olympics on the cheap, by employing large numbers of migrants workers on self-employed contracts paying them far less than they would have to pay British employees.

Alan Ritchie, also said: “We will do everything to ensure that no worker faces exploitation while building the Olympics. This is meant to be a flagship project not a sordid back street operation. Operating on a nod and a wink and trying to stay one step ahead of the authorities is intolerable.”