Recently, I attended a presentation and during the question and answers stage one person who operates in the construction industry decided to have a bit of a rant. In his words:

I’m being walked all over by the government, by HMRC and by the whole world in general day in and day out. As a small business owner I already have a hefty responsibility to contribute. I pay corporation tax and Employers National Insurance, I operate a VAT scheme and collect that for them. Then, because I am in the CIS industry, I have to operate a CIS scheme , I pay CITB levies and I have 20% of my income deducted at source. On top of this, it seems like every day we are issued with new rules on health & safety, environmental regulations, waste disposal etc…

Those working in the construction industry haves many reasons for feeling hard done by.

First the bad news:

The recession has had a huge effect on the construction industry and for some, the recovery is starting to feel like it will never happen.

Those in construction have been caught in what seems to be a vicious cycle. A down turn in income, profit margins being squeezed and a general lack of cash from customers has meant that everyone has struggled and some simply haven’t been able to make it. Those that didn’t make it have inevitably gone down owing money to others which in turn makes it harder for them to continue.
All of this has meant that financial institutions such as banks are very unwilling to lend to such a volatile, high-risk industry so the sources of funding which could have helped companies to survive, have simply dwindled.

The construction industry are one of the most heavily regulated industries having to contend with numerous health & safety and environmental regulations.

Any employers/contractors in the industry know that there is also a heavy burden of paperwork, with monthly CIS returns and annual CITB levy returns to complete. As well as having to verify every sub-contractor you take on, provide monthly CIS statements to every sub-contractor and ensure that you pay the correct amount of CIS tax over.

Then, there is the annual battle to get back from HMRC the CIS tax you have had deducted from your own income.

Yes, those in the construction industry have many reasons for feeling hard done by!

Now the good news:

The recovery is happening! A lot of people we speak to in the construction industry have noticed that they are absolutely rushed off their feet! In fact, the biggest problem seems to be finding enough reliable sub-contractors who will represent your company well.

Cash flow is still an issue but there is more willingness from banks and others to lend and there are even a few companies which have sprung up who are dedicated to helping those in construction with funding issues. Debt factoring has become much more widely accepted. It is no longer synonymous with a company in financial trouble.

HMRC have made a few steps into the 21st century in the past few years which means that sub-contractors can be verified and CIS returns can be submitted online, this has made the costs and time involved in dealing with the paperwork a little less onerous. But it is still not enough!

Heroic

Which brings me on to my final point, the day after the presentation, a friend of mine told me she heard two men discussing the ‘rant’. In short, they were saying that a builder couldn’t possibly understand the current economic situation well enough to comment on it!

So I would just like to explain to people who feel this way that a person who owns a construction company is not just someone with a tangible, hands-on skill, they are also people who have incredible business acumen, are experts in health & safety legislation, tend to be tax consultants to their sub-contractors, act as tax collectors for HMRC and maybe possess just a little bit of luck!

Personally, I feel that anyone who has managed to stay afloat in this volatile industry deserves to have the business they aspire to!

Vikki