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RCI March 2018

Project1_Layout 1 07/05/01992 INDUSTRY NEWS HMRC has introduced a new online employment status indicator tool for insulation and other construction companies who engage, and make payments to sub-contractors on a self-employed basis. Firms across the country have received letters signposting them to check the employment status of sub-contractors using its Check Employment Status for Tax (CEST) tool. CEST allows companies to see whether an operative should be classed as employed or self-employed, with a view to moving them from Construction Industry Scheme (CIS) to PAYE for tax purposes. Ian Anfield, managing director of Hudson Contract, explains what the tool means for firms in the industry and what they can do to avoid costly penalties resulting from CEST. He said: “HMRC is targeting thousands of firms which it knows regularly reports CIS payments for the same sub-contractors. It hopes that some of these firms will find, after using the tool, that the sub-contractors should actually be employed, and will encourage them to take appropriate action moving them from CIS to PAYE. “The financial consequences of failing CEST could be absolutely disastrous, and a construction company with only a handful of subbies could be destroyed. A small error could result in firms finding themselves facing a huge bill for unpaid tax and National Insurance contributions. It could also result in CIS subbies being permanently reclassified as employees.” A recurring issue is that many firms in the insulation industry, find tax and employment law tough to understand, and when there are rigorous HMRC due diligence obligations to contend with, CIS can be a minefield. “These changes, coupled with the Supreme Court’s recent ruling that workplace tribunal fees are unlawful, are daunting for construction firms,” said Ian. “Firms now run the risk of facing an ongoing torrent of costly, stressful and often-bogus attempts to win an employment tribunal pay out, as well as being in danger of falling foul of HMRC status risks. Zink Copper Stainless “We have already noticed a huge increase in activity with no-win-nofee lawyers and unions once again playing the employment tribunal card at every opportunity. “When it comes to both of these risks – CEST and tribunal cases – our experience tells us that if we deal with things correctly, work within our robust processes, and treat people fairly, we and our clients have little to fear because they are fully protected by Hudson Contract. “We would encourage those who don’t fully understand HMRC status inspections to read up on the subject or get in touch with us.” To find out more about Hudson Contract and the potential impact the incorrect usage of the CEST tool could have on your business, visit: www.hudsoncontract.co.uk. MCRMA gains a trio of new members Wage rate changes to kick in, in April 008 MARCH 2018 RCIMAG.COM 801927 www.almhm.co.uk The Metal Cladding and Roofing Manufacturers Association (MCRMA) continues to go from strength to strength, and has welcomed three new member companies to the Association. Euramax Coated Products has joined as a member of the component manufacturers’ group. Meanwhile, the independent roofing and cladding inspectors’ group has increased its numbers with the addition of GDH Consulting and AWM Surveyors. The MCRMA represents the leading manufacturers across all four categories of membership: systems manufacturers, components manufacturers, independent roofing and cladding inspectors and industry support services. These companies have delivered to the majority of the industry’s most prestigious buildings, creating imaginative and innovative building designs that offer both costeffective and sustainable solutions. The best way to speed up housing delivery is to get more small builders back into the market and focus more attention on the potential of smaller sites, according to the Federation of Master Builders (FMB). In response to Theresa May’s speech, ‘Building a Britain fit for the future’, Brian Berry, chief executive of the FMB, said: “Small sites tend to deliver more quickly and smaller builders have every incentive to build and sell quickly. More opportunities for these smaller developments will diversify the market, boost capacity and speed up delivery. “The government has recognised this, and is setting out changes to national planning policy that will encourage more small sites to come forward. We particularly welcome the move to ensure that at least 20% of the sites identified for housing in local authority’s plans are smaller sites.” Brian continued: “However, we also need to be aware that the pace of building homes cannot be simply dictated. Those whose business is building houses have very few incentives to just sit on land. SME builders in particular have every incentive to build and sell as quickly as they can, so that they can recoup their investment and move on to the next project – nothing else would make financial sense. “But developments can be stalled and slowed down for perfectly good reasons – from the financing difficulties, which can often affect smaller builders, to downturns in market conditions. Building a house is a very significant investment, and housebuilders who build without being sure they can sell, don’t stay in business very long.” Brian concluded: “There is reason to push back against developers who have a particularly poor track record of delivery, and those who seek planning permissions purely for speculative purposes, but the government needs to make sure that rhetoric doesn’t get ahead of reality. It should recognise that attempts to force building at a rate which makes poor commercial sense could end up slowing down delivery. This could end up discouraging the SME builders and new market entrants we need to diversify the market.” The government is set to increase the National Minimum and National Living Wage rates on April 1. These changes will include the largest increases in a decade for the rates that apply to 18-20 and 21-24 year olds. The hourly rate for the minimum wage depends on the age of employees and whether they’re an apprentice. Employees must be at least school leaving age to get the National Minimum Wage, and aged 25 to get the National Living Wage – the minimum wage will still apply for workers aged 24 and under. From April 1, the rates will change to the following: 25 and over – £7.83 (up from £7.50); 21 to 24 – £7.38 (up from £7.05); 18 to 20 – £5.90 (up from £5.60); under 18 – £4.20 (up from £4.05); and apprentice - £3.70 (up from £3.50). Apprentices are entitled to the apprentice rate if they’re either: • Aged under 19 • Aged 19 or over and in the first year of their apprenticeship Apprentices are entitled to the minimum wage for their age if they both: • Are aged 19 or over • Have completed the first year of their apprenticeship. Small sites and small builders will build homes faster, says FMB Brian Berry HMRC turns up the heat with indicator tool


RCI March 2018
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