Tax changes that will lose construction workers working under umbrella companies an average of £1000 a year have begun today.
Thousands of construction workers will face a financial loss from today, due to new tax changes on expenses that have come into effect for workers employed through an umbrella company, personal service company or employment agency.
Claiming tax relief on travel, food and overnight accommodation will no longer be possible due to the government changes.
Construction union UCATT estimates that workers operating via umbrella companies will on average lose £1,000 a year and in one case the union has seen a worker face seeing their take home pay cut by £3,369 a year.
Workers operating via umbrella companies who are payed under the terms and conditions of an industrial agreement such as the Construction Industry Joint Council (CIJC) Working Rule Agreement, will be severely affected, with UCATT estimating they will be £600-£900 a year worse off.
Workers employed by umbrella companies are often classed as ‘self-employed’ and lose out on holiday and sick pay and pension rights.
The Treasury estimates the changes will bring in an additional £150 million a year in revenue.
UCATT have led the campaign against umbrella companies, who charge workers directly for their services and fees – up to £30 a week, on top of the requirements to pay both the employers’ and employees national insurance contributions.
Workers under umbrella companies are on zero hour contracts, which mean they are not guaranteed any work.
Brian Rye, Acting General Secretary of UCATT, said: “This is an absolute kick in the teeth for construction workers who are already being forced to work under the exploitative yoke of umbrella companies and employment agencies. All of the additional costs will be met by the workers and the employers businesses will be entirely unaffected.
“Once again this shows how this Conservative Government are making workers suffer, while giving a free pass to their friends in business.”