Modular, regulations, retentions. It could be a big year in construction, Taylor Wessing’s Matthew Jones suggests
The new year in the Gregorian calendar is pretty unforgiving. Holed up in our wintry cubbyholes, we can dream of what it may bring but long before our snowdrops and daffodils flower. The Babylonians, the Persians and other parts of the sub-continent harmonised their new year with spring. Much nicer to make new year’s resolutions with the sun on your face. So in a spirit of renewal and progress, here are some predictions for 2019:
This innovation has been evolving across the globe and the UK and I anticipate that we will begin to see large scale housebuilding using modular construction techniques. We need it – and we also pray that both housebuilders and local authorities help support the roll out. It is going to fundamentally change the way new housing estates are delivered across our towns and country.
I was going to predict, in response to the immediate and fundamental need to ensure our buildings are safe, new regulations that adopt world’s best requirements on fire safety. In fact, we’ve seen new regulations released late this year, restricting use of combustible materials in external walls for certain residential or institutional buildings over 18 metres high. Expect 2019 to be a period of clarity under the new regime but uncertainty and disputes in relation to buildings constructed under the now superseded regulation.
This had been up for negotiation given the fallout from Carillion. The issue tends to divide opinion, depending on who holds the retention purse-string, but there is a palpable push for some more regulation. I wouldn’t be surprised then if there is some regulation around how retention is to be held and I’d be surprised if it isn’t protective for payees in the event of insolvency of the payer.
VAT reverse charge for construction services
This one is big. HMRC have made a legislative push to tackle perceived under-recovery of VAT in our industry. Although first conceived to tackle labour gang tax fraud, the draft laws are to extend broadly across the industry. What’s the big change? Now purchasers of construction works or services will have to account for VAT, rather than the supplier. My take is that this is a Leviathan and there will be growing pushback. Predicting a better change: the authorities should target hard those involved in fraud and those taking advantage of the more vulnerable. The Gangmasters and Labour Abuse Authority has been established by The Home Office and is to do remarkable work; giving them a bigger baton with HMRC co-operation would be a great initiative for the new year.