Crossrail’s moved goalposts allows contractors to avoid tax payments
- Thursday 22 April 2021
Unite, the UK’s construction union, has learned that secret changes to the way procurement rules operate on the heavily delayed Crossrail project mean that contractors are able to ignore previous rules and boost their profits by not paying national insurance contributions for workers.
Since the beginning of the Crossrail project clear procurement rules have been in place stating that workers on the project should be “employees”. This means that contractors were obliged to pay employers’ national insurance contributions which are 13.8 per cent of an employees’ earnings.
However, earlier this year, Unite revealed that the rules on only employing employees were being broken on the Bond Street station project by the principal contractor Engie and sub-contractor NCCT. Electricians who were working on a full PAYE basis were being made redundant while workers who had been engaged on self-employed terms were continuing to work on the project.
When Unite further challenged this with Crossrail the union received the following response from Angela Williams, the chief people officer at Crossrail: “As you know the engagement of NCCT as a contractor working on the Crossrail programme is now a matter for NCCT and ENGIE and not Crossrail directly.”
Williams' statement means that Crossrail believes the rules on direct employment and the requirement that workers are employees no longer apply if work is contracted or sub-contracted (which is standard practice in the construction industry).
With parts of Crossrail not expected to be completed until sometime in 2022, the removal of the requirement to ensure that only employees are recruited on the project will result in a significant loss to the exchequer.
Moved the goalposts
Unite national officer for construction Jerry Swain said: “Crossrail has secretly moved the goalposts on direct employment, which will deny the exchequer tens of thousands of pounds in much needed revenue.
“Instead, this money will go directly into the coffers of the contractors and sub-contractors, while the self-employed workers are denied all employment rights and don’t even receive holiday pay – further boosting contractors' profits.
“Management at Crossrail, and Transport for London, have serious questions to answer about who decided the change in procurement rules and why. There needs to be an urgent investigation into who exactly is financially benefiting from this moving of the goalposts.”
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Unite is Britain and Ireland’s largest union with members working across all sectors of the economy. The general secretary is Len McCluskey.