In Construction, Not Every Problem is a Nail

Contractors in construction and the new legislation

We’ve spoken before about the 2014 legislation changes, dealing with how contractors in the construction industry are classified. Now those changes are beginning to take hold, and it’s time to do something concrete about it.

The central problem is that the new rules are designed in part to dissuade people working through intermediaries. However, even if your only tool is a hammer, not all your problems are nails. The construction industry has always had unique employment needs, and now companies are getting caught up in a regulatory framework that’s trying to bash a square peg into a round hole. In addition legislation which is coming in on April 2016 where HMRC are disallowing intermediaries to pay weekly tax free travel and subsistence expenses, will also increase the pressure on agencies about how they engage their staff.

The main effect of all this is pretty clear from the figures released by accountants UHY Hacker Young recently. The new crackdown has seen more and more construction industry firms struggling under the weight of justifying the self-employed status of their workforce. Revenue from increasingly aggressive inspections has leapt up by 17%, and is now more than twice what it was five years ago. That stacks up to an astonishing and record-breaking £154 million.

Not nearly enough has been done to communicate with businesses and explain their obligations under the new scheme, such as providing quarterly reports explaining why workers on their payroll are not PAYE. As a result, many are now in serious danger of getting unexpected and very unwelcome PAYE and National Insurance bills. Keep in mind that these bills could worst case scenario stretch back for 4-6 years, gathering interest and eye-watering penalties along the way. Failing to provide the correct paperwork could risk paying up to four years’ worth of PAYE and six years’ worth of National Insurance contributions, plus interest and anything up to 50% of the tax in additional penalties. Now more than ever, it’s vital for construction firms to make sure all their paperwork is up to date and organised. All of which brings us back to RIFT Legal Services.

The RIFT Group was built on the simple idea of helping workers in the construction industry. As we grew, those foundations formed the core of everything we do at RIFT. Our new division, RIFT Legal Services, is the next logical extension. We’re helping businesses to keep their taxes under control, and making sure they understand every obligation and opportunity the ever-changing regulations establish. It’s no easy matter to keep a business within rules that were never designed to suit any one sector, and these inspection revenue figures from HMRC are proof of that.

We’ve got seasoned experts and years of experience to draw from, along with the same determination we started out with. Overpaid tax is a burden that so many are bearing without even knowing it, and it’s threatening the long-term health of businesses that could otherwise be thriving. RIFT is working to put a stop to that, and our Legal Services division is on the front lines of the fight. By getting right into the blueprints of your business, we can assemble all the documentation you’ll need to build your case for HMRC. We’ll also provide advice on weatherproofing your enterprise against HMRC challenges.

Even if it’s all coming down around your ears, RIFT Legal Services can still protect you. If HMRC digs its heels in after we’ve made your case, we’ll cover the damage ourselves. That’s the RIFT guarantee, and you won’t find it anywhere else.

We still believe the UK is a fantastic place to work in construction. We’re doing everything we can to make sure it stays that way.