A freedom of information request submitted by construction union Ucatt revealed that the number of workers who received payments via the Construction Industry Scheme increased last year.
HM Revenue & Customs confirmed that 963,000 workers received payments via CIS in 2014/15 adding that “this figure will increase later this year as a result of some returns being made late.”
This is a 39,000 increase on the 924,000 workers paid via CIS during 2013/14.
Ucatt said that the 4.2% increase in the use of CIS was surprising as in April 2014 the government introduced new rules that prevented agencies and other ‘intermediaries’ from employing workers on a self-employed basis.
The changes in the rules resulted in hundreds of thousands of workers becoming employed by so-called umbrella companies and this was expected to result in a fall in the number of workers employed via CIS.
Ucatt national secretary 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.”
In 2012 Ucatt estimated that false self-employment in construction was costing the Exchequer £1.9bn a year. It said that the principle beneficiaries were employers who avoided paying £1.2bn in employer’s national insurance contributions.