New research published by the TUC has found that around 3.2 million workers in the UK are now in precarious employment in the form of casual work, self-employment and zero-hours contracts.
The TUC says that as many as 40 per cent of self-employed workers are classed as low paid which is an increase of 21 per cent over the last decade.
According to the research, insecure work is costing the exchequer around £4 billion a year in lost income from taxes and from benefits such as tax credits and housing benefit.
The research echoes comments by Matthew Taylor who was appointed last year by the prime minister to advise on the future of work. He said the self-employed and contractors were paying more than £2,000 less in tax than equivalent employees.
Self-employed and zero-hours working arrangements have led to controversy in recent months, with the High Court ruling that drivers for the taxi app, Uber, should be considered employees and not self-employed.
A Government spokesperson told The Guardian: “The government is committed to creating an economy that works for everyone and this is why Matthew Taylor is leading an independent review into whether employment practices need to change in order to keep pace with modern business models.
“We recognise that the tax system also needs to adapt, and the government is considering ways to ensure it remains fair, simple and effective for everyone.”