New data has revealed an increase in the number of self-employed people working in UK construction…
Despite attempts to decrease the amount of casual labour in the construction industry new data has revealed a surprising rise.
Union UCATT obtained figures via a freedom of information request, which showed the number of workers who received payments through the Construction Industry Scheme (CIS) increased last year.
A total of 963,000 workers are said to have received payments though CIS in 2014/15. This figure is expected to increase during the year with some returns expected to come in late. In 2013/14 the figure stood at 924,000.
The union also found that false self-employed and casualisation grew during the last year. This has been an issue for the sector and was said to cost the Exchequer £1.9bn a year in 2012. Employers also avoiding paying around £1.2bn in national insurance contributions.
However, the increase in the number of self-employed construction workers comes as something of a surprise, said the Union. This is due to the fact new rules were introduced by the government in April 2014 that prevent agencies and other intermediaries from employing workers on a self-employed basis. It was expected, therefore, that the number of workers employed via CIS would fall.
National Secretary of UCATT Brian Rye 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.”
Howard Royse, construction industry representative for the Institute of Chartered Accountants in England and Wales also commented on the news. He said: “The increase in the number of subcontractors being paid through CIS in 2014/15 does not indicate how long those people were engaged as self-employed – it may have only been for a few days.
“Many of those workers will have been paid through both CIS and umbrella schemes in the course of the year.
“The recent increase in activity levels in construction is bound to lead to more workers being engaged, through direct employment and self-employment. That does not in itself make those self-employment engagements bogus.
“The change in rules for intermediaries resulted in more agencies putting workers through umbrella schemes, for fear of how HMRC may enforce the rules regarding supervision, direction and control.
“No doubt some genuinely self-employed workers were affected by this reaction.
“This may well have produced a short-term reduction in money paid in tax – but the new rules for travel and subsistence expenses should address the matter of dodgy operators offering high take-home pay schemes.”