The government must clamp down on construction agencies that ignore the Inland Revenue’s tax scheme for construction workers, according to the REC.

The REC believes that agencies ignoring the Construction Industry Scheme (CIS) are illegally gaining a competitive advantage.

Self-employed workers hold a subcontractor’s tax certificate and agency workers hold registration cards under the CIS rules.

Some agencies are gaining a commercial advantage by not deducting tax and National Insurance contributions from workers holding the registration cards, the REC believes.

Agencies operating like this are making savings of up to 12%, said the REC’s technical division head, Phil Anders.

He said: ‘This is a huge difference and gives those agencies a great advantage.’