A report by the House of Commons鈥� Public Accounts Committee has warned that the black economy is costing the Treasury 拢2bn a year in unpaid tax, National Insurance and VAT.

The construction sector is thought to account for a substantial part of that figure. The Federation of Master Builders puts the value of construction鈥檚 black economy at 拢4.5bn, and estimates that 拢780m is lost a year through VAT evasion.

Alan Ritchie, general secretary of construction union Ucatt, said: 鈥淕iven the highly casualised nature of the industry, these findings are both unsurprising and conservative.鈥�

He added: 鈥淭he report does not take into account money lost through false self-employment 鈥� Ucatt places this figure at at least 拢1.7bn a year.鈥�