UCATT have welcomed the BBC’s One Show programme which featured evidence of the continuing “umbrella con trick engulfing the construction industry”.
The programme included filming with UCATT National Secretary Brian Rye who outlined the loss to the HMRC of tax contributions from agencies and employers operating in the construction industry and the exploitation of workers routinely given an ultimatum to accept this form of working or else have no job.
Steve Murphy, General Secretary of UCATT, said, “The One Show programme has yet again highlighted the umbrella company con-trick. It is abundantly clear that paying workers by an umbrella company is unfair and immoral. Workers and the HMRC are being sold short so that employers and agencies can boost profit margins.”
The Government has committed to consulting on the tax relief on travel and subsistence claimed through umbrella companies, but UCATT argues that the whole system must be removed from the construction industry, and workers are either employed or genuinely self-employed.
The umbrella tax scam emerged in April 2014 after the Government introduced legislation which prevented agencies and payroll companies categorising workers as self-employed. UCATT say that although each scheme is slightly different the main characteristics of the umbrella scheme is that a workers gross pay is paid into the theoretical umbrella company. The umbrella company’s fee and employers national insurance contributions are deducted. The worker is then paid the national minimum wage, and deductions are made for tax and employees NI. The workers earning are then boosted through “performance related pay” and/or “expenses”.
Mr Murphy added, “The umbrella tax scam is a blatant attack on workers’ pay. Construction workers are being paid the national minimum wage, with the rest of their pay made up by sketchy expenses claims that we are informed are often fraudulent. Agencies and contractors are also forcing the workers to pay the NI contributions they should be paying. It must be brought to an end by the next government.”
