Construction companies say it feels like they are having to wade through wet concrete – and the government keeps on tipping it in. By Ian Anfield MICE, Managing Director of Hudson Contract
The latest example is the new health and social care levy on employer wage costs and employee earnings. This comes six months after the double whammy of new off-payroll working rules known as IR35 ( IR35: the reality for construction with Hudson Contract) and the VAT domestic reverse charge. These add to the burden on SMEs already having to automatically enrol employees on pension schemes, pay the CITB tariff and act as tax, immigration and modern slavery inspectors to stamp out any illegality in their supply chains.
The government seems determined to make it harder to both employ people or use contractors. This increasing complexity is proving difficult for everyone, even civil servants – HMRC has hit the Home Office with a £33.5m tax bill for “careless” compliance with off-payroll working rules. If government departments with armies of bureaucrats can’t get it right, what hope is there for busy company directors?
This constant attack on getting things done is becoming a huge headache for owner-managers who want to get on with pricing jobs, delivering construction projects on time, getting paid and making sure whoever does the work for them does so safely. Most specialist contractors are lean on back office staff and middle managers, many are former tradesmen or engineers who win work by doing a good job and keeping overheads to a minimum. They have no desire to employ expensive HR and legal personnel or a team of scriptwriters to help them access government frameworks, they just want to get on with building their businesses by delivering for their clients.
With the constant commentary that construction is dirty, dangerous and stuck in the dark ages, HMRC is taking an increasingly hard line on construction. For many building firms, prices and payment terms are agreed on a handshake and contractual terms never see the light of day. But when the taxman comes along and can’t find a paper trail, he automatically assumes something untoward must be going on. This mistrust of the industry is based on a lack of knowledge and understanding of how our industry works. It is not helped by self-appointed experts and those with vested interests who constantly call for construction to modernise and yet at the same time argue for it to reduce its use of self-employed tradespeople and return to the employment practices of the 80s.
Add into the mix the rising costs of building materials and skilled labour, and it’s easy to see why firms feel like the concrete is setting around their feet. But help is at hand and a growing number of companies are turning to Hudson Contract to pull them clear. Hudson eliminates risks and red tape and allows companies to access the most highly skilled and productive pool of labour resource in the industry without hassle whilst they get on with growing their businesses.
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It makes perfect sense to outsource management of the ever-growing tangle of red tape and increasingly complex risks, but company directors should beware of storing up trouble for later by going with the wrong provider. There is a huge and growing number of dodgy umbrella companies which call themselves ‘commercial contractors’ and promise to magic away agency regulations, CIS compliance and VAT liabilities under sham contracts that have no longevity.
Commercial contractors are the equivalent of fly-tippers, piling up firms’ liabilities in laybys where at some point HMRC will come along to open the bags and trace where it came from. For 25 years Hudson has done things properly, borne out of testing the law, understanding its limitations and making things as simple as they can be for our clients. Firms using Hudson don’t need their waders and can sleep soundly knowing their liabilities have been incinerated. Those using commercial contractors should ask themselves how long they think it will be before the shutters burst and what will happen when six years of their rubbish turns up in a country lane.
Ian Anfield MICE is managing director of Hudson Contract. Before joining the company in 2007, he spent 17 years in the industry with firms such as Balfour Beatty, Mowlem and Alfred McAlpine, progressing from civil engineering trainee to project manager.
This article was paid for by Hudson Contract
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