CONSTRUCTION union Ucatt leader Steve Murphy declared war yesterday on the “unscrupulous sharks” running a tax-dodge scam that has seen thousands of pounds docked from workers’ pay.

People across Britain have been caught up in the “umbrella companies” sting which sees firms use a legal loophole to shift costs onto workers.

Mr Murphy told how members had contacted his union in shock after seeing take-home pay slashed.

They were shunted to new “employers” following a government clampdown in April on bogus self-employment — the previous method used by construction agencies to avoid paying 13.8 per cent national insurance on wages.

“It happened overnight,” Mr Murphy told the Commons launch of a Ucatt report exposing the con.

“These unscrupulous sharks are using the construction industry to make as much money as quickly as possible,” he said.

The scam sees agencies shunt their tax obligations onto workers by handing cash to arm’s-length umbrella firms which then deduct “costs” — equivalent to employers’ national insurance — and other fees from the advertised rate.

In one case detailed by the union a worker meant to earn £600 for a 50-hour week saw £118.56 deducted in “fees.”

Tax was then paid on a lower amount of £519, which had been topped up with a phoney “bonus” and advance “holiday pay.”

Instead of the £464 his take-home pay was £410.

Report author Jamie Elliot said firms were using complex payslips “to try to bamboozle workers, but it’s actually very simple.”

Labour MPs were out in force yesterday to back the fight to outlaw the scam.

Liverpool Walton member Steve Rotherham accused the government and Treasury of turning a blind eye to “legalised larceny.”

But he said there was growing momentum to end the abuse.

South Shields MP Emma Lewell-Buck recalled how a constituent working on a new NHS hospital had approached her “with one of the most complex pay slips I’d ever seen” after his weekly pay dropped by £80.

She accused ministers of giving workers “false hope” by boasting they had ended bogus self-employment.

“Everyone except this government is up for the fight,” she added.

Shadow Exchequer secretary Shabana Mahmoud warned that the scam was “seeping into” other sectors such as care and education.

“Workers ought to be declared employed unless proven self-employed,” she said, vowing that a Labour government would close the loophole.

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