The Union of Construction Allied Trades and Technicians has warned that a recent high-profile fraud conviction was merely scratching the surface of a wider problem in the industry.
UCATT general secretary Steve Murphy said the case was “just the tip of the iceberg” and called for “root and branch reform” of the industry.
He added that: “The loss to the treasury from the various scams existing in the construction industry is astronomical. All of the practices are highly dubious, although some are currently legal.”
“This case needs to serve as a wake-up call to the Government. There is no point in tinkering to try to end these scams. Root and branch reform is needed to end the casualised nature of the construction industry, which allows for these highly dubious practices to flourish.”
The convictions unveiled yesterday took place last year but have only now been publicised, due to reporting restrictions relating to ongoing court cases.
They involved a series of companies that had been submitting false expense claims instead of passing tax and national insurance payments to HM Revenue and Customs, resulting in the retention of millions of pounds worth of tax.
In 2008, UCATT warned in a report that the treasury was losing £1.7bn each year to false self-employment. The union had previously warned that as many as half of workers in the construction industry, or one million people, was illegally working as self-employed.
The £1.7bn figure is expected to have risen during the recession due to a lack of enforcement by the HMRC and the inception of a number of new schemes to minimise taxes paid.