Last month, we hosted our Connection Event:21 Focus on the Construction Industry event as part of Huddersfield Business Week 2021.
We welcomed two guest speakers from local businesses including Howarths HR and Employment Law and Resolute Commercial Finance. For those who missed the event, we've summarised the key takeaways below.
Anna Schiavetta from Howarths provided updates on two extremely topical areas; employment status, and alcohol/drug testing. Whilst Vicki Walker from Resolute Commercial Finance shared insights into the latest developments in the availability of finance within the construction industry.
First up, Vicki Walker from Resolute Commercial Finance shares her key points from her talk:
For Contractors
- Challenges to cashflow with increasing costs of materials and extended payment cycles
- Appetite from Invoice Finance Lenders remains strong amongst more specialist lenders
- Asset Finance Lending remains strong
For Developers
- Appetite has remained strong for residential schemes of all sizes even throughout the pandemic although funding commercial developments is a challenge
- Lenders keen to fund 100% of build costs where land already owned with some willing to assist with the purchase as well
- 100% funding in some cases for more experienced developers where cash is tied up elsewhere
- Increase in demand for bridging/refurb loans from developers keen to purchase doer uppers
For more information or insight, be sure to contact Vicki directly to discuss your finance options.
Next up, Anna from Howarths Law covered two employment law hot topics in the construction industry:
Employment status
- There are three different types of employment status under employment law – an employee, worker and self-employed. The distinction is important as it affects the individual's employment rights and an employer's obligations.
- It is really important for employers to obtain legal advice on the employment status of their workforce to ensure those that are categorised as self-employed are genuinely self-employed. There can be significant consequences from an employment law and tax point of view if an employer mislabels, for instance, an employee as self-employed.
Drug and alcohol testing
- Employers cannot force employees to undertake a drug and/or alcohol test, but an employer can make withholding consent a disciplinary matter in certain circumstances.
- If an employer proposes to carry out drug and/or alcohol workplace testing they should ensure they have a drug and alcohol testing policy in place, obtain their employee's consent and comply with data protection rules.
If you need HR support, contact experts at Howarths with your questions today.
Alongside the insight from our guest speakers, our directors Kevin Winterburn and Carolyn Atkinson also provided an overview of recent changes to be aware of in the industry. These included recent changes introduced by HMRC such as VAT domestic reverse charge, changes to the Construction Industry Scheme and an increase to National Insurance.
VAT Domestic Reverse Charge:
- Introduced 1st March 2021
- Applies to supplies that fall within the scope of CIS
- No VAT to be charged by the subcontractor (unless the customer is the end-user of the supply). Instead, the contractor receiving the services accounts for the VAT on their VAT return.
- More information can be found here
Changes to the Construction Industry Scheme (CIS):
- Introduced by HMRC on 6 April 2021
- HMRC now have the right to amend a submission for CIS suffered by an employer if they do not believe the amount to be correct
- Change in penalty regime i.e. if providing false information when applying for gross payment status
- No real change for those with their house in order
- More information can be found here
National Insurance increases:
- With effect from April 2022
- 25% for employees
- 25% for employers
- Also additional 1.25% on dividends
Our team of accounting experts based in Huddersfield are on hand to help you navigate the changing landscape in the construction industry and discuss your accounting options. So if you're a West Yorkshire based business, contact us today!