Crackdown on firms which deny work rights to 'self employed'

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Ministers have launched a new crackdown on firms which use large numbers of self-employed or agency workers in order to deny them employment rights.

Treasury Financial Secretary Jane Ellison has said HM Revenue and Customs was "transforming" its compliance approach with the formation of a new team dedicated to tackling such issues.

The move comes after Labour MP Frank Field, chairman of the Commons Work and Pensions Committee, called for an investigation into practices at delivery company Hermes UK.

HMRC executive chairman Edward Troup said he had referred a report from the MP on the so-called "gig economy" - including details of 20 individuals concerned about their employment status - to the "appropriate compliance teams" for consideration.

In a letter to Mr Field, he wrote: "If we find that companies have misclassified individuals as self-employed, we will take all necessary steps to make sure that they pay the appropriate tax, NICs (national insurance contributions), interest and penalties."

Ms Ellison said that employment status in the UK was determined by the "reality of the working relationship" and that individuals could not be "opted out" of employment rights and protections simply by describing them as "self-employed".

"I can reassure you that the Government takes false self-employment very seriously and is committed to taking strong action where companies, to reduce their costs, force their staff down routes which deny them the employment rights and benefits they are entitled to," she said in a letter to Mr Field.

"HMRC is currently transforming its compliance approach with the creation of a new employment status and intermediaries team to focus on status and employment intermediary risks.

"This dedicated resource will allow HMRC to better focus their resources and expertise to ensure these issues are effectively tackled."

The moves were welcomed by Mr Field, who said: "Clearly the Government is girding its loins for a serious fight back against those companies trying to wriggle out of their obligation to pay the minimum wage by enforcing 'self-employment' on their workers."

A spokeswoman for Hermes told The Guardian: "We are confident in the legality of our self-employed courier model and we will co-operate fully with any investigation, should there be one."