According to a report from the TUC low paid self employment costs the Exchequer £9.7bn in lost tax each year, with zero-hours contracts costing a further £614m. The TUC predicts that more than £192m is lost each week.

The research, which used the latest tax and benefit modelling, stated that low paid self employment, zero-hours contracts, and other forms of ‘precarious’ work, are resulting in the ‘eye-watering’ cost as low-paid self employed workers and those on zero-hours contracts are earning significantly less than regular employees and therefore paying less tax and National Insurance contributions (NICs).

It also added that the result of people stuck in low-paid self employment and on zero-hours contracts means that they are more reliant on social security payments to top up their incomes as well as tax rates being lower for self-employed workers.