Revenue site inspections target illegal contractors

The Revenue Commissioners have begun an intensive audit of building sites in the Republic, as part of a crackdown on illegal …

The Revenue Commissioners have begun an intensive audit of building sites in the Republic, as part of a crackdown on illegal subcontracting. So far, more than 400 sites in Dublin have been inspected and a third of contractors found to breach the tax laws.

The move follows growing pressure from the building trade unions for action against contractors, who they say are forcing construction workers to classify themselves as self-employed. At present, only 35,000 of an estimated 100,000 workers in the industry are registered for PAYE.

According to the general secretary of the Plasterers Union, Mr Niall Irwin, 21,000 of the remainder have tax clearance and are legitimate sub-contractors. This leaves 45,000 "who have declared themselves to be self-employed".

His experience, however, is that "the vast majority of these workers have been forced to falsely declare that they are self-employed in order to gain work on sites".

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One employer, who did not wish to be identified, said yesterday that many employees wanted to work on "the lump". Labour shortages have meant they could always find alternative jobs if employers tried to put them on PAYE. Savings on PRSI and other overheads can help an employer cut labour costs by 20 per cent, if workers are self-employed.

But Mr Irwin and SIPTU construction branch secretary Mr Eric Fleming blamed employers for the level of illegal sub-contracting. Mr Fleming, also a member of the Health and Safety Authority, said: "There is a direct correlation between the rise in self-employment and the abysmal safety record of the construction industry.

"People are working pell-mell to meet deadlines. I have dozens of people ringing me, saying they are forced to be self-employed and breach safety laws."

Growing numbers of "self-employed" building workers are also dissatisfied because they will have to do without Christmas holiday pay. The recent bad weather means they have not been paid "wet time", or the guaranteed minimum 39-hour week which direct employees receive.

Mr Irwin added: "If the current spell of turbulent weather continues for much longer, many of these building workers and their families will face a very difficult Christmas."

Both officials were encouraged by last week's Supreme Court decision, where it was found that employers could not evade their responsibilities by making workers sign contracts to say they were self-employed. But they said the Revenue's inactivity had worsened the problem.

Mr Irwin said there were just 12 Revenue officials to detect PAYE and PRSI fraud in the construction industry in Dublin. "The task of inspecting thousands of building sites is clearly beyond them." Mr Fleming accused the Revenue of ignoring the problem.

A Revenue spokeswoman said last night that there was no question of ignoring tax abuses. Since the beginning of last month a special outdoor operation had targeted the sector. It was planned to inspect more than 4,000 sites throughout the Republic. Those breaking the law would be prosecuted, she said.

The secretary of the Alliance of Specialist Contractors Association, Mr Martin Lang, represents 450 companies involved in extensive sub-contracting operations. He says the association is aware of the Revenue operation. "We understand the review to date has shown the vast majority of member companies to be complying with the new system."

He welcomed "any step to level the playing pitch", provided it was applied "in an even-handed manner".