Almost two thirds of construction companies have been asked to carry out work for an underhand payment. 

A new Construction Industry Federation (CIF) survey on the black economy also found that 54% of construction companies have been approached by construction workers offering to carry out work for cash payments while continuing to receive social welfare. 

The survey discovered that there is a considerable appetite for paying construction workers cash rather than complying with the taxation system, with 95% of companies having come across a black economy operation in the last three months. 

More than half believe that black economy operators have damanged their business by 20%, while more than two thirds have met clients who experienced problems with work carried out.

One respondent complained over the poor quality of materials: "A contractor was asked to fit expensive exterior lighting fixtures at a house, every sort of cable was used, no junction boxes were used and the cables were connected with connectors and wrapped in insulating tape. Horrendous."

CIF Director General Tom Parlon explained the difficulties legitimate firms face in competing with illegal operations.

"There is a reason why black economy operators are able to undercut their rivals. They don’t make the correct tax returns, they have workers using social welfare payments as a subsidy to their wages, poor quality materials are used, corners are cut, the proper building practices are not followed and the proper health and safety standards are ignored."

The CIF is working with the Government to set up a new register of construction companies where only those companies who are tax compliant will be able to be listed on the register. It also offers a series of steps for clients to follow in order to avoid black economy operations. 

• Ask for a contract
• Ask for a VAT number
• Check if they have a C2 certificate
• Ask about where the construction materials came from
• Ask if they have certified health and safety standards
• Check if they have insurance
• Ask if they are members of the CIF

Parlon also called on the Government to introduce tax incentives for legitmate construction work in the upcoming budget.

See the full results from the survey below.

• 95% of construction companies have come across a black economy operation in the last 3 months.  While 70% of construction companies have come across an increased number of black economy operations since the turn of the year and 76% have come across an increased number in the last 12 months. 
• 95% of construction companies think they have lost jobs to black economy operations in the last 12 months while 50% believe they have lost 6 more jobs to black economy operations in the last 12 months.
• 94% of those who lost out on jobs to black economy operators believe it is because they submitted a cheaper tender.
• 40% believe that black economy operators always pay their workers with cash outside of the tax system while 51% believe they do this regularly. 
• 53% of construction companies believe that wages paid by black economy operators undercut legitimate firms by more than 20%. 
• 68% of construction companies have come across clients who have experienced problems with black economy operators or the work they have carried out, while 58% have been asked to repair the work done by a black economy operator. 
• 71% of construction companies believe the materials used by black economy operators are lower in quality.
• 66% of construction companies describe the health and safety standards as poor quality on any construction sites run by black economy they have come across while a further 24% would describe them as non existent.  While 11% of construction companies are aware of accidents occurring on construction sites operated by black economy operators.
• 37% have come across construction sites run by black economy operators where the health and safety standards put employees, clients or others at risk. 
• 30% of construction companies have found that clients do not ask if their company has insurance before starting a job.
• 90% of construction companies think the Government needs to take stronger action to regulate black economy operators in the construction industry.  While 84% of construction companies would be in favour of more regulation if it helped reduce black economy operations in the construction sector and 86% believe that black economy participation in public projects could be reduced with better regulation.
• 88% of construction companies would welcome stronger scrutiny of the construction sector by Revenue if it would help reduce black economy activity.