The number of construction workers receiving payments via the business tax Construction Industry Scheme (CIS) rose last year in spite of Government efforts to limit self employment in the sector.
According to figures obtained by construction union UCATT following a freedom of information request, 963,000 workers received payments via CIS in 2014/15. This is an increase of 39,000 compared to the 2013/14 period and, according to HM Revenue and Customs, “this figure will increase later this year as a result of some returns being made late.”
According to UCATT, this recorded increase in the use of CIS is surprising due to the Government’s efforts in April 2014 to introduce new rules preventing agencies and other “intermediaries” from employing self-employed workers. UCATT says these changes in the rules have resulted in hundreds of thousands of workers being forced to operate via umbrella companies and were therefore expected to result in a fall in the number of workers employed via CIS.
Brian Rye, national secretary of UCATT, said: “These figures show the fragmented mess that the construction industry is in. The Government’s changes, which were meant to reduce false self-employment, clearly haven’t worked while at the same time hundreds of thousands of workers are being employed by agencies via umbrella companies.
“It is clear that the only way to resolve the problem is for fundamental change with workers either being classed as employees or being genuinely self-employed in business for themselves. Further tinkering of the rules will just make the situation worse.”
In 2012, UCATT estimated that false self-employment in construction was costing the Exchequer £1.9bn per annum. The principle beneficiaries are employers who avoided paying £1.2bn in employer’s national insurance contributions.
