Our view on the big issues facing the construction industry next year
10th December 2020 | Ian Anfield
As the construction’s biggest payer of subcontractors, Hudson Contract has a unique insight into real-time demand for skilled labour in our industry. After an extraordinary, unprecedented year, who knows what 2021 will bring?
As long as the money keeps flowing, the sector will be buoyant. Government intervention is key to keeping the show on the road. The stamp duty holiday is due to end on March 31. The policy has pushed up mortgage approvals to the highest level in 13 years. Will the Chancellor extend the measure? Given the importance of housebuilding to the UK economy, we believe industry pressure will force his hand.
For many people, 2020 will be a year to forget and who can blame them? Like virtually every other sector, construction was hit hard by the pandemic with activity falling off the proverbial cliff in the first national lockdown. Fortunately, our sector bounced back quickly with Hudson’s monthly pay trends figures showing a resurgence in demand for labour. We raised awareness in The Sunday Times and The Sun newspapers with Hudson's evidence of a V-shaped recovery.
In a world of uncertainty, you can trust that Hudson will be here to support clients during good times and bad. Changes to VAT and off-payroll working rules are coming in March and April respectively and businesses need to get ready now. As the market leader, we can sooth any compliance headaches.
Many building companies have yet to grasp the impact that domestic reverse charge will have on their operating models. Some finance directors “think” they will be okay but they need to be absolutely sure: this is black and white for HMRC and substantial cash flow is at stake. There is also vagueness around IR35 and how it will impact companies. Don’t get your information from Google, speak to your Hudson regional manager for the facts about how these VAT changes will affect your business.
Who could forget Brexit? Whatever happens on the political front, companies should remember one thing: EU citizens living in the UK by December 31 have until June 30 2021 to apply to the EU Settlement Scheme. Different rules apply for workers arriving after January 1. Again, speak to your Hudson regional manager for the facts about how these new immigration rules will affect your business.
Whatever happens in 2021, we believe self-employed tradespeople will be key to a strong and sustained recovery. They are vital drivers of economic efficiency - enabling competition, entrepreneurship, the use of specialised labour, the spreading of risk and the reduction of excess production capacity. They also help to reduce fixed costs, financial constraints and barriers to entry.
As our pay trends figures show, freelancers earn a substantial premium to equivalent employees, illustrating the extra added value they help to generate and their ability to capture a significant share of the gains. In other words, they are vital. Just ask any of our 2,500 clients how important they are for our industry.
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