Brian Cowen (Laois-Offaly, Fianna Fail)

I am informed by the Revenue Commissioners that establishing employee or subcontractor status is one of the areas they specifically concentrate on in their monitoring of tax compliance in the construction sector. On an ongoing basis, Revenue auditors, based on risk assessment, audit the books and records of a considerable number of contractors and subcontractors. The matter of employee to subcontractor status is always examined as a routine part of such audits.

In this regard, I am informed that Revenue does not accept at face value assertions as to subcontractor or independent agent status. The true nature of the relationship between the parties is looked at having regard to factors such as the degree of control, obligation, integration or exclusivity involved in the relationship. These factors are set out in the code of practice in determining employment status that was published by Revenue with the assistance of the Department of Social and Family Affairs and the Department of Enterprise, Trade and Employment and the Irish Congress of Trade Unions.

During 2006, Revenue is devoting a quarter of its audit and compliance resource to policing building-related sectors. As part of this national project, the issue of misclassification of building operatives as self-employed will continue to be actively dealt with. Revenue also continues to meet industry representatives and trade unions to ensure compliance in this area and to help the industry get the status of their workers right. Ongoing improvements to Revenue's computer system used to monitor relevant contracts tax will also assist in targeting cases of likely misclassification of employees as subcontractors.

See this speech in context