Mr. Niall Cody:

I have said already that I disagree with it. The arrangement we entered into was that if you were a self-employed person, such as a courier, the PAYE system could be operated to return the tax that was due. It did not determine that someone was self-employed. It was that if you were self-employed, this arrangement could be used. It had regard to the facts and circumstances of the case. As I said, we have been challenging bogus self-employment consistently throughout the past 20 years. We engage on it.

The relevant contracts tax was introduced in 1971 to reflect practices that were taking place in the construction sector. These sectors are traditionally a mix of principal contractors, subcontractors and employed people and that mix fluctuates as time goes on. New industries have grown up. One of the things we are interested in looking at is the idea of extending the scope of relevant contracts tax to sectors where there is subcontracting, where people are self-employed rather than employees. The biggest feature in recent years is the growth of personal service and managed service companies, the corporate structure. At the high end of subcontracting, it is rarely a self-employed person; it is a company. Companies present a particular problem. We cannot look through a company's structure to reclassify a company as an employee.