Latest:
Tax hits smaller firms
00:00 17 May 2000
|
by Tim Wood
Small- and medium-sized builders are continuing to suffer from the after effects of the Construction Industry Scheme, the controversial new tax system, with more than two-thirds experiencing recruitment problems as a direct result.
The latest state of trade survey carried out by the Federation of Master Builders has revealed that many of the respondents had experienced so many problems that they feared being driven out of business because of the lack of profitability. The CIS has also reduced the availability of skilled tradesmen with many opting to work for themselves or shifting into the black market, often in direct competition with those companies for whom they had previously worked.
The survey, covering the first three months of 2000, also showed that the number of firms reporting an increase in workloads has gone up by 9%. However, the modest increase, mainly in the repair, maintenance and improvement sector and commercial work, is underlined by there being no leap in total employment levels and an easing of delays in obtaining supplies of materials.
The answers from 360 FMB members also showed that 34% of builders remained optimistic that increased orders will continue into the second quarter, while others had expressed their concern over the longstanding effects of the CIS and the continuance of the punitive VAT rate.
Commenting on the findings, FMB president Derrick Ovington said: "Although we welcome the increase in workload, the business environment for many of our members continues to be difficult with the ill-thought-out CIS resulting in unnecessary red tape and problems with recruiting labour. In addition, by not reducing the level of VAT on domestic RMI, the Government has failed to address the black market activities of the cowboy operatives against registered builders.
"The negative impact of CIS and burgeoning black economy on the industry takes the edge off this modest increase in workload. An increase in workload is of small comfort if there is no profit incentive."
Small- and medium-sized builders are continuing to suffer from the after effects of the Construction Industry Scheme, the controversial new tax system, with more than two-thirds experiencing recruitment problems as a direct result.
The latest state of trade survey carried out by the Federation of Master Builders has revealed that many of the respondents had experienced so many problems that they feared being driven out of business because of the lack of profitability. The CIS has also reduced the availability of skilled tradesmen with many opting to work for themselves or shifting into the black market, often in direct competition with those companies for whom they had previously worked.
ADVERTISEMENT
The survey, covering the first three months of 2000, also showed that the number of firms reporting an increase in workloads has gone up by 9%. However, the modest increase, mainly in the repair, maintenance and improvement sector and commercial work, is underlined by there being no leap in total employment levels and an easing of delays in obtaining supplies of materials.
The answers from 360 FMB members also showed that 34% of builders remained optimistic that increased orders will continue into the second quarter, while others had expressed their concern over the longstanding effects of the CIS and the continuance of the punitive VAT rate.
Commenting on the findings, FMB president Derrick Ovington said: "Although we welcome the increase in workload, the business environment for many of our members continues to be difficult with the ill-thought-out CIS resulting in unnecessary red tape and problems with recruiting labour. In addition, by not reducing the level of VAT on domestic RMI, the Government has failed to address the black market activities of the cowboy operatives against registered builders.
"The negative impact of CIS and burgeoning black economy on the industry takes the edge off this modest increase in workload. An increase in workload is of small comfort if there is no profit incentive."
ADVERTISEMENT
Most Viewed Articles
- 6,400 construction firms will fail by mid-2009
- Balfour, McAlpine and B+K chase £40m Edinburgh commercial work
- Ex-employee jailed for £32,700 theft from builders merchant
- Bam, Balfour, Carillion and Skanska pursue £60m Strathclyde uni projects
- Persimmon attempting to refinance £900m debt, Bovis Homes does the same
ADVERTISEMENT