by Nicky Smith | Dec 12, 2017 | Main News Feed
The Department for Communities and Local Government (DCLG) published the first output from the Industry Response Group (IRG) on 11 December. It not only contains guidance for owners of high-rise buildings on what to do where the building is clad with Aluminium Cladding Material (ACM) but also provides guidance on compartmentation.
The Information Note is intended to assist building owners in assessing what measures they should consider taking to make their buildings safe. It contains a flowchart to guide building owners through the process of remediation and further information on the following:
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- identifying and testing aluminium composite material (ACM) cladding systems
- checking broader fire safety of buildings
- progressing remedial works and maintenance
- durability and safety considerations if cladding has been removed
- professional advisors and where to find them
- building regulations and planning
- procurement of building work
The Industry Response Group consists of members from the Construction Industry Council, Build UK and the Construction Products Association; FIS is contributing to the CPA group.
by Nicky Smith | Dec 12, 2017 | Main News Feed
The Government’s plans to tackle VAT fraud in the construction industry by introducing a domestic ‘reverse charge’ VAT scheme for construction services will come into effect on 1 October 2019. The HMRC Consultation Outcome was published on 1 December and there will be a technical consultation on draft legislation in spring 2018.
What does this mean in the supply chain?
As an example, the main contractor who owes a subcontractor £100 plus VAT £20 will only pay them £100 and will pay the VAT straight to HMRC. The subcontractor will, therefore, receive only 83% of the actual cash into their bank account. Although they won’t have to pay as much VAT to HMRC as they do now, there won’t be the funds swilling about to keep going in an hour of need. VAT owed to the Government is often used by firms to keep afloat.
It’s not just main contractors and major subcontractors who will be affected – everyone paying anyone else for work done who is not the end consumer of the service – a customer – will be required to reverse charge VAT.
The whole business of invoicing for work done and what VAT to show on an invoice, who determines the rate of VAT due on a supply and how we all communicate the rates to be used, will be up for grabs.
All accounting software used in the industry will have to change. In addition, we will all be ‘Making Tax Digital’ and getting our accounting packages to report quarterly at the same time.
It is going to be a difficult couple of years for the IT, tax and accountancy specialists in construction.
by Nicky Smith | Dec 7, 2017 | Main News Feed, Transformation
Peter Aldous, a chartered surveyor before being elected to parliament in 2010, has tabled a private member’s bill to protect the millions of pounds of cash retentions withheld from construction SMEs. The Ten Minute Rule Bill will seek to amend the 1996 Construction Act and ensure that retentions within construction are held in a third party trust scheme. A key aim will be to help protect companies in the construction supply chain from insolvency and payment uncertainty. The Bill’s first Reading took place on 9 January 2018 and can be viewed via the link on the right.
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Recent research commissioned by the Department for Business, Energy & Industrial Strategy (BEIS) has revealed that £7.8bn worth of retentions was outstanding over a three-year period. Peter Aldous said that he was concerned about the impact on SMEs: “I have been aware of retentions as an issue for a while, and with construction being a tough industry and uncertainty surrounding many aspects of the economy, small businesses need as much support as possible.” He added: “Over the past three years, £700m worth of retention payments to small businesses were lost due to the insolvency of a client, and if a small business suffers from an upstream insolvency of this kind, they are punished twice; firstly with the loss of work, and secondly with the loss of retention money. We, therefore, need action on this before more millions are lost. SMEs are the backbone of the UK economy, which is why they need support and protection. This bill is not about abolishing payment retentions; it is about making sure that people’s money is safe so that businesses can grow and invest in their future.”
Join the campaign – download the FIS letter template and write to your MP to request their support of the Retentions Trust Bill before the second reading which takes place on Friday 15 June.
by Nicky Smith | Dec 4, 2017 | Main News Feed
Seven of the construction industry’s major trade bodies have set out what they believe to be the sector’s responsibilities and requirements in a post-Brexit labour market. The Association for Consultancy & Engineering, Build UK, Civil Engineering Contractors Association, Construction Products Association, Federation of Master Builders, Home Builders Federation and National Federation of Builders support the joint Construction Industry Brexit Manifesto.
The document sets out 12 key recommendations to the Government and industry on what it will need from a post-Brexit immigration system in order to be able to deliver the Government’s strategic objectives for new housing and infrastructure, including:
- The Government should embark upon a communications campaign that makes clear to EU workers currently residing in the UK that they will have no serious impediments to gaining settled status
- Industry bodies should continue to work with CITB to conduct a construction industry-wide census and other research that provides a clear evidence base regarding skills requirements and future training needs, now and in the longer term
- The Government should agree a transition period of at least two years as soon as possible during which time EU workers arriving in the UK should continue to have a path to settled status
- The construction sector should agree what it can realistically achieve in terms of increased training and recruitment of homegrown workers over the next five years based on the industry-wide census
Suzannah Nichol MBE, Chief Executive of Build UK, said: “Construction, like other major industry sectors, has substantial concerns over the impact of Brexit on its ability to recruit, train and retain talent. It is essential that industry works together to present the need for an effective partnership between Government and industry, enabling us to deliver the UK’s infrastructure, homes and communities.”
Prof. Noble Francis, Economics Director at the Construction Products Association, said: “Access to the right skills will be absolutely critical for the whole construction supply chain in the next few years if it is to help Government achieve its aims of building more affordable housing and improving the UK’s infrastructure, which will be vital for boosting UK productivity.”
John Slaughter, Director of External Affairs at the Home Builders Federation, said: “With the Budget having confirmed a target to deliver 300,000 homes a year by the mid-2020s, home builders will need to continue to bring more skilled people into the industry. Companies are building on their existing investment through the successful work of the CITB-supported Home Building Skills Partnership and are committed to doing even more, but to deliver the national social and economic necessity of an improved housing supply we will also continue to need access to foreign workers under a manageable migration system.”
by Nicky Smith | Dec 4, 2017 | Main News Feed
In 2017, the President’s Lunch, Contractors’ Awards Lunch and Scottish Awards Lunch welcomed nominated charities to collect donations and proceeds from each of the prize draws totalling £8,498.
In February, representatives from the BounceBack charity attended the President’s Lunch to collect £2,726 raised in the prize draw. The first prize, sponsored by Metsec, was a Fortnum and Mason hamper. Second prize was an Amazon Kindle, sponsored by CCF. The third prize was a BB-8 Droid, jointly sponsored by Vela Training and approved training provider NowGetQualified.
The year’s biggest event, the Contractors’ Awards Lunch, raised a total of £4,640 for BounceBack; the auction of the ‘Ceiling Fixer’ sculpture (see photo above) went to Tapper Interiors with a very generous winning bid of £1,650. Representatives from BounceBack collected £2,990 in donations from attendees.
In October, we invited Hansel Fundraising to the Scottish Awards Lunch in Edinburgh. FIS members Brian Hendry Interiors, Scotwood Interiors and Veitchi Interiors donated prizes for the draw which raised a total of £1,132.
We will continue to support various charities in 2018; our first event is the President’s Lunch on Tuesday 6 February. If you haven’t done so already, book your tickets here.
by Nicky Smith | Dec 4, 2017 | Main News Feed
Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: “Across construction supply chains, delivery times have been under pressure, as materials were in higher demand, while stocks remained in short supply. Lead-times from vendors have now deteriorated in every month for over 7 years. Overall, the sector showed an incremental improvement, but business optimism was on the rise and up from last month’s five-year low. Perhaps the darkest days are behind the sector with fresh impetus on the horizon for the New Year.”
New orders and employment numbers also increased to the greatest extent in five months. However, the improvement in construction growth was largely confined to residential work. The latest survey revealed sustained reductions in commercial building and civil engineering, with the latter now experiencing its longest period of decline since the first half of 2013.
The latest reading of 53.1 was the highest for five months and signalled a solid rate of business activity growth across the construction sector. House building projects were again the primary growth engine for construction activity. Survey respondents suggested that resilient demand and a supportive policy backdrop had driven the robust and accelerated upturn in residential work. Commercial construction was the weakest performing area of activity in November, which continued the trend seen for much of 2017 so far.
Some firms noted that Brexit-related uncertainty and the subdued economic outlook had held back spending among clients. Meanwhile, civil engineering activity fell for the third successive month, which represents the longest phase of decline seen for over four years. That said, the latest drop in work on civil engineering projects was only marginal. Some survey respondents commented on hopes that forthcoming tender opportunities on infrastructure programmes (particularly energy and transport) would help to support workloads.
Construction companies indicated a moderate rebound in new orders in November, with the rate of expansion the fastest for five months. Anecdotal evidence cited a general improvement in client demand after the soft patch this summer. Higher levels of new work helped to support a moderate rise in staff numbers and input buying in November. Lead-times for construction products and materials lengthened sharply, linked to pressure on supplier capacity. However, cost inflation eased to its least marked for 14 months, with some firms reporting signs that exchange-rate driven price rises had started to lose intensity. Business confidence regarding the year-ahead outlook for construction activity remained among the most subdued since mid-2013, which panel members mainly linked to heightened political and economic uncertainty. However, the degree of optimism picked up from October’s 58-month low, helped by a modest recovery in new invitations to tender during the latest survey period.
Download the full report here.
