Trade body wants three-month VAT, PAYE and CIS payment holiday

The government has been urged to take radical action to protect small contractors from going under as the coronavirus wreaks havoc on workloads across the country.

As the spread of the virus threw the future of construction activity across the country into doubt, the Federation of Master Builders (FMB) said smaller building companies needed urgent and immediate additional support to prevent wide-scale insolvencies and job losses.

small builder

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The FMB is worried how many small builders could go under as a result of the coronavirus pandemic

As fears grow that the multi-billion-pound support package announced by the government earlier this week won’t be enough to stem the tide of firms going bust as jobs grind to a halt, the FMB has called on the government to provide a raft of measures to help the sector.

The FMB wants a three-month tax holiday on VAT, PAYE and CIS payments and a delay to the implementation of reverse charge VAT by a year.

It also wants the chancellor to extend the £25,000 cash grant, currently only provided to retail and hospitality businesses, to construction firms and provide the equivalent rate of statutory sick pay to the self-employed who fill 37% of industry jobs.

Another demand was to ensure that the coronavirus Business Interruption Loan Scheme is both user-friendly and launched as soon as possible.

Brian Berry, chief executive of the FMB, said: “The government has overlooked the market in which small builders operate. Builders working in the domestic sector simply cannot work from home and are already feeling the impact of the pandemic as a result.”

Berry said ministers must intervene as a matter of urgency if small building companies were to protect their workforces, avoid further job losses, and prevent building companies going to the wall.

The FMB’s demands were echoed by other industry bodies. The Building Engineering Services Association said nine out of 10 of its members were “concerned or very concerned” about the impact of coronavirus on their business over the next six months, with half of the engineering services respondents (51%) to its latest poll said they had already encountered delays and disruptions to current projects, with that figure rising to 61% among larger businesses.

The group’s legal and commercial director Debbie Petford said: “Although these are just preliminary findings, the sheer scale of the disruption to the sector is alarming.

“We will be working around the clock to provide as much guidance as possible to our members and calling on the government to keep providing additional stimulus and support as the situation evolves.”

And supply chains and infrastructure will be further hit by illness and school closures, as parents had to stay home with their children, according to the Management Consultancies Association (MCA).

Tamzen Isacsson, the MCA’s chief executive, said: “We need to keep critical infrastructure work in the UK going and vital supply chains moving. Key services such as energy, water, telecoms and other key functions form the backbone of our economy and need to keep functioning.

“These could be heavily impacted by school closures next week and must also be considered.”