Apologies for bumping a slightly old thread, but I just want to thank posters for useful advice and the recommendation to use PAYE. My DP works in the construction industry and it's exactly the same there.
We are going to look into asking his agency about paying him PAYE rather than through the umbrella company who are just stealing half his wages and tricking him into tax evasion which he does not want to be part of. All he wants is to go to work and earn an honest wage and pay his taxes fairly.
Most people who work on building sites (brickies, plasterers, plant drivers etc) are agency staff who are offered what sounds like a reasonable wage for a skilled job (eg £12 per hour for a 40 hour week).
However when he gets paid through the umbrella company they pay it as minimum wage and then some of the extra is made up via 'expenses' and bonuses. It's a hassle to send in all the receipts every week but we have to do it or else his wages are short.
I help him do his accounts and I am dreading doing his tax return (he has a number of 'jobs' so has been on self assessment for a while and it was OK until this year when the Umbrella companies start).
I was thinking of setting him up as a limited company but it seems that the law is changing again (up to last year he was in the construction industry scheme which is a way of taking tax of them straight away instead of via a tax return but that has now been outlawed as that required them to be self employed which HMRC says they are not) but I don't know if it would be worth it for the amount he earns (about £20k per year).
The way I see it is that the umbrella companies are parasitic scamming bastards that are exploiting people trying to earn an honest wage due to them:
making the EMPLOYEE pay the EMPLOYERS national insurance contributions.
Charging over £1k per year for the pleasure of processing wages
Forcing the employees into unwanted tax evasion in a desperate attempt to keep not even something like a fair cut of their own hard earned wages.
And it looks like we are going to lose his expenses for last week because his claim 'was selected for audit' and the receipts he gets from the little sandwich shop he buys his lunch from don't have the correct date on . And also he didn't buy anything one day but still claimed because otherwise they just steal another tenner a day off his wages. (They don't ask for him to send receipts in they just say to retain them so we have been claiming the money at the encouragement of the umbrella company otherwise they just take half his wages).
Wouldn't it be nice if you could say to the umbrella company 'I don't want to bother with all this expenses, bonuses and minimum wage bollocks, what I want you to do is pay me what the agency give you, minus a reasonable marging for your costs' (we didn't have that much of a problem with the £18 a week for their margin when he was on CIS because he got all the rest of his wages minus the tax that was taken off).
It looks like it is going to be even more important to be on PAYE with the agency if the law changes because if people can't get the expenses, they will end up earning only minimum wage despite doing a skilled qualified job, whether it be supply teaching or in the building trade. 
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Does anyone know if you can be PAYE on more than one agency? DP is on a long term contract at the moment (few months) but before that it was two weeks here and the odd day there for 2 or 3 different agencies.
He also expects to end his building site work in a few weeks because he has other work that does not involve agencies, umbrella companies or the construction industry in the summer and he only took on the building site work to earn money out of season from his main work.